SME Times News Bureau | 07 Jan, 2020
Micro, Small and Medium Enterprises (MSME) want the
government to ensure timely payment of their dues and bills from government departments
and large corporates.
In its budget recommendation to the Finance Minister Niramala Sitharaman,
'LocalCircles', a community social media platform, has told Finance Minister
Nirmala Sitharaman that many government departments and big corporates take
months to clear the bills, despite the platform raising the issue with the
ministry earlier in June last year.
"Since working capital is critical to startups and MSMEs, such payment
delays create a big cash flow issue. Since GST becomes payable upon generation
of invoice and the invoice stays unpaid for months, it only worsens the cash
flow," it said in a letter to the Finance Minister.
It observed that businesses have also reported that many government departments
and large corporates are delaying the acknowledgement and booking of invoices
in their system by several months and then at a later date, ask suppliers to
send updated invoices.
It also requested the government to create a process for government departments
and large corporates to disclose the details of all MSME invoices due for over
45 days and said that a mechanism should be created to penalise them for
non-payment of MSME dues in the stipulated time period.
Further, the letter also mentioned that many startups and MSMEs have reported
that the refund of the TDS (tax deducted at source) takes a long time and almost
all startups and MSMEs are awaiting the income tax refund for FY 2018-19. It is
requested that the government processes TDS refunds within 45 days for past due
refunds and any future refunds.
"When it comes to GST refunds, many officers are not processing refunds
where there is a lack of clarity on the issue. For example, many companies have
reported an issue of offsetting the GST Input Tax Credit (for services) charged
by their suppliers against the product sales Input Tax Credit that they collect,"
said the letter signed by Sachin Taparia, Chairman of LocalCircles.
It requested that all areas within GST where there is lack of clarity with the
field officials are identified and due clarification and information is shared,
so that GST decisions by officials are expedited.