Modi hints at GST relief for small, medium-sized firms
Micro, small and medium enterprises, crucial to Modi’s plans to create a million jobs a month, have been hurt by the massive tax overhaul that added layers of extra bureaucracy for firms and hit exports.business Updated: Nov 04, 2017 21:53 IST
Thousands of Indian small firms and traders hurting from higher cost of doing business under a new multi-rate tax regime might receive some relief next week.
Prime Minister Narendra Modi said on Saturday that if there is consensus at the next Goods and Services Tax (GST) council meeting on November 9 and 10 then necessary measures could be taken to help small and medium-sized businesses and traders.
Micro, small and medium enterprises (MSMEs), crucial to Modi’s plans to create a million jobs a month and many of whose promoters are traditional voters of his Bharatiya Janata Party, have been hurt by the massive tax overhaul that added layers of extra bureaucracy for firms and hit exports.
India has about 56 million small and medium-sized firms that account for some 110 million jobs in the country, official data show.
“We have positively acknowledged all the issues and suggestions given by small businesses and traders,” Modi told industry leaders at a conference on business reforms.
“And I have confidence that if states don’t create any difficulty then all steps needed to strengthen the business world and the country’s economy will be taken at the GST council meeting.”
MSMEs with annual sales less than Rs 1.5 crore, which were earlier exempted from the central excise duty, have come under the GST regime on account of a lower Rs 20-lakh sales threshold for GST.
The new sophisticated IT-driven tax regime has put a compliance burden on small businesses as large businesses tend to prefer GST registered material and service suppliers.
The GST Council has already taken several measures to ease the compliance burden of small businesses. The next meeting of the council is expected to further liberalise the ‘composition scheme,’ a simplified tax payment plan for small businesses, and lower tax rates.
Prime Minister Modi also used the occasion to vow more reforms, leveraging India’s record jump of 30 places in the World Bank’s latest ease of doing business ranking. He said realising the country’s economic and social development was his sole purpose in life.
“I am confident that with continuous efforts, we can improve further. After the ranking improved to 100 from 142 (in the survey published in 2014) I am not able to sleep. I wish to do more…I have one life and one mission,” Modi said.
Ease of doing business will lead to ease of life too, he said.
The Prime Minister also took a dig at the opposition leaders for doubting the World Bank ranking, saying those who worked with the bank were now doubting its survey.
“But there are some people who cannot understand this...,” Modi said in the presence of World Bank chief executive officer Kristalina Georgieva.
“They don’t want to work, but are quick to question those who do.”