Coimbatore: FOCIA members appreciated the sincere initiative taken by Minister to gather grievances on GST particularly from Micro and Small sectors.
Coimbatore: FOCIA members appreciated the sincere initiative taken by Minister to gather grievances on GST particularly from Micro and Small sectors.
In a press release they saud, "We hope such an initiative will yield good results and lead to the development of our industries.
As per GST Councils database there are 1.28 crores GST registrations in India, as on March 2021. TamilNadu has 10.20 lakh registrations which is around 8%. Our state contributes 8.25% of total GST revenue and stands at 3" place among Indian states.
The GST Council also reveals 93% of Tax payers have below Rs.5 crore annual turnover and belong to the Micro sector. Hence our representation will focus on the hardships experienced by Micro and small Industries and the GST reforms required to stimulate the growth of these sectors in our state.
There is no doubt that Micro and small enterprises who were not paying excise duty in pre GST era, are the least benefitted and also the worst affected by GST. It was proclaimed by the Central Government that the main objective of the GST system was to simplify the Taxation mechanism, to reduce the burden of taxes and to enhance ease of doing business.
Prime Minister Shri Narendra Modi termed GS T would be a “Good and a straight forward“ tax. In reality it was not for Micro and small enterprises. Instead of implementing a single motto to introduce “a simplified, hassle free taxation system“, the Tax Authorities have simultaneously enforced multiple hidden agenda like :
1. Widening tax payers network
2. Increasing Tax compliance and revenue
3. Collecting enormous business data from the tax payers for later scrutiny or check up.
With these additional aims, the hapless small tax payers are compelled to file enormous details in so called “Annual Returns“, GSTR 9 which even the auditors find it tedious and strenuous task till date. In previous VAT regime the Annual returns was filed by most of the entrepreneurs within few hours, without the Auditors help.
With these additional aims, the genuine tax payers are continued to be viewed as “perennial tax evaders“ and more stringent provisions and rules are introduced, resulting in undue harassment and mental worries for the entrepreneurs . The attention of Micro small industries are diverted from pursuing lofty aims and goals, and is detrimental to the growth plans.
To summarise, it is high time to eliminate the birth pangs of the GST system and to transform it to “Good and Simple Tax“.
We request the Hon Commercial Tax Minister to form a “GST reforms Committee“ with due representation to Micro and Small Industries. We hereby submit our proposals to such a committee on Policy, Procedural and Tariff changes as well as Governance aspects.
I) Procedural / Compliance aspects :
a) GST registration Number
The registration number is an important tool to avail the Input Tax Credit. This number should not contain characters like |, O, B, Z wchich are often mistaken as numerals like 1,0,8 and 2 respectively and lead to clerical errors. We request to avoid “ |, O, B, Z “ characters in GST registration numbers.
b) Assessment Officer / Circle
The exercise of assigning Circle or Assessment Officer to every Tax payer should be completed. Still there is no clarity for the tax payer on which circle they belong to.
c)Interference by other than assigned circle :
GST rules have provisions that the Tax payer can be questioned or summoned by any Intelligence wing other than home circle. These draconian rules should be withdrawn. Every tax payer should be dealt by their home circle only.
d) Regarding the old VAT assessments, we request a “Samadhaan Scheme“ a One Time Settlement over pending assessments and penalties for non submission of ‘C” forms.
ll) Tariff changes
a) Job order works :
During VAT regime, the engineering job order works were tax exempted. Now it is levied at 12% GST. Because of this high tariff the Micro units are subjected to a financial crisis, as normally their bills are paid only after 3 months, by the large companies.
Entire GST paid on job orders are taken as Input Tax Credit (ITC) by the Principal companies and there will be no revenue loss to the Government if this tariff is reduced. We request the Government to reduce the GST for Job order works to 5% and relieve the Micro Units from the enormous burden.
b) Concessional Tariff for Micro Units :
All the Goods and services supplied by the Micro sector and the purchases made by them should be levied at 5% GST only. The Government will not lose revenue as almost all the tax paid are taken as ITC. This reduction will certainly increase tax compliance reduce working capital burden of Micro units and enhance their growth.
llI) Governance
a) Ensure bill payments as per MSMED Act
As per the MSMED Act 2006, the bills of Micro and small units are to be paid within 30 and 45 days respectively. The Micro units are unable to pay GST dues in time because of the delayed payments to them. The GST registration of big companies (who delay payments to the MSME’s) should be withheld or deactivated and reasonable compensation should be ensured for the victimised units.
b) Appellate Tribunal
We learn there is no Appellate Tribunal constituted under GST and we request that it be formed immediately. Due to short notice we are unable to gather all the points from our members. However, we assure to submit more grievances at the earliest for your kind consideration and action."