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The Goods And Services Tax (GST) Council will focus on issues that Micro Small Medium Enterprises (MSME) taxpayers face, at its 29 th meeting to be held on 4 August 2018. The GST Council has asked the indirect tax department to make a list of grievances of MSME taxpayers and suggestions from them. The indirect tax department has to send list to the Central Board of Indirect Taxes (CBIC) by Friday, 27 July 2018.
On Saturday, Finance Minister Piyush Goyal would hold a meeting with the tax department and make a final list of issues for discussion in the council. Goyal, who assumed charge as finance minister due to Arun Jaitley’s illness, would be chairing the second GST council.
In its 28 th meeting last Saturday, the GST Council allowed smaller taxpayers with turnover up to INR 5 crore per year to file their returns on a quarterly basis, while they file taxes every month. The Reverse Charge Mechanism (RCM), which was a major obstacle in MSMEs obtaining supplies from unregistered dealers, has been deferred until 30 September 2019. As per the present form of the RCM, if the supplier is unregistered, the registered buyers will have to pay the tax, leading to additional compliance burden.
Several MSMEs get the raw material from unregistered suppliers; therefore, the entrepreneurs regard the RCM provision has been regarded as a major obstacle in doing their business. This has led to low GST compliance even after a year after introduction, with only 60% of the eligible taxpayers file returns within the deadline.
According to experts, MSMEs face typical issues in GST compliance, such as bandwidth restrictions, paucity of capital due to delay in refunds, issues related to knowledge of GST Act. The MSME stakeholders face many challenges due to demonetisation, rise in inflation, contracting demand, shrinking bank finance and disruptive GST implementation. The next council meeting would focus on easing these difficulties.[/vc_column_text][/vc_column][/vc_row]
