GST UPDATE Govt plans easier GST compliance for small businesses

The Government is planning an easier set of compliance norms for small businesses with annual turnover of under Rs 20 lakh as it seeks to widen the tax base to plug loopholes and make the Goods and Services Tax (GST) more broad-based.

While large companies are already registering their sub-vendors, many of whom are below the prescribed threshold, several are still left out, resulting in a burden on the large entities.

In a cautious response, PIA President Sri R. Krishnamurthy acknowledged that while the move was welcome, it should not become a tool to harass the small entre-preneur. “It is true that for the benefit of GST to flow at every stage of the manu-facturing and distribution chain, everyone from the raw material supplier to the component maker, transporter and the packing material supplier has to be registered, many of whom may not have annual sales of Rs 20 lakh. But the Government should also make sure that the process is not cumbersome for the small business. It should be like say Saral (the income tax form), a single-page form with only the sales and purchase details to be furnished. At the same time, there is some apprehension that this may end up as a way to harass the small enterprise.”

According to reports, the new compliance mechanism is being worked out by the Central Board of Excise and Customs but it is still at conceptualisation stage. Based on the plan, rules will be finalised by the GST Council.

The move comes shortly after PM Sri Narendra Modi triggered a debate about registering those below the current threshold of Rs 20 lakh. Earlier this month, the Prime Minister had urged tax officers to ensure that benefits of GST reach the common man and even small businesses with a turnover below Rs 20 lakh are registered under the new tax regime.

Another official said the idea is to ensure that those registered under GST and doing business with non-registered entities have a clear database of their business links. The idea is not to harass them but get a better picture of these businesses and also help them get the benefit of GST in future.