Dinesh Kamath's Editorial 'MSME is the main concern of GST Council' that was published in Newsband

MSME is the main concern of GST Council

The Goods and Services Tax Council focuses on the concerns of small firms. The GST Council revenues have slipped somewhat after peaking in April. The first three months of this financial year have yielded an amount which is well short of revenue target a month for 2018-19. The steep rate cuts effected on several items in the last Council meeting were to kick in from July 27, so their full impact on revenue collections may take more time to unfold.

The revenue loss from the most recent tax cuts may be 0.04-0.08% of GDP annually. it is in this context of revenue concerns that the Council’s dedicated focus at its latest meeting on issues facing micro, small and medium enterprises (MSMEs) is a creditable move.

Setting up a ministerial group to look into the problems faced by MSMEs is another good move. It has been decided that Firms with an annual turnover of less than ₹5 crore need no longer file cumbersome returns every month, but only on a quarterly basis.

The concerns on a proposal to push digital payments by offering a cash-back to consumers using RuPay cards or the UPI platform have been incorporated. Now, States will volunteer to run a pilot on these lines and a final decision will be taken after a detailed system-wide evaluation of such incentives.

Some feel that Rates of taxes under the GST shouldn't be changed too frequently. It would be best to have the rates reviewed only once in a year. The government should also try to ensure that the benefits of tax cuts are, at least partially, passed on to the consumers. The continuation of revision of GST indicates it has not been a well-thought-out policy and no adequate time was taken to prepare the draft contents and possibility of future repercussions

But there are supporters of this move too. According to them, it is the right move of the GST council in looking the problems of the MSME which are the roots for industrial development of the country and to get more ease of doing business with high tax compliance. Government must not concern the reduction in tax revenue by making cuts in the initial stage for MSME. First the nationwide indirect tax platform must be strengthened beyond revenue concern both for domestic and foreign investment.