The CODISSIA President Ramesh Babu participated at the Budget Discussion held in Chennai on 28th February, in which he requested for bringing in new loan schemes for start-ups.
Coimbatore: CODISSIA President Ramesh Babu participated at the Post-Budget Discussion held in Chennai on 28th February, in which he requested for bringing in new loan schemes for start-ups.
M.V. Ramesh Babu, President, CODISSIA participated in the Post-Budget Discussion held on 28.02.2022 at Chennai, with Nirmala Sitharaman, Minister for Finance and Corporate Affairs, Government of India and submitted the memorandum covering the following MSME issues for the consideration of the Finance Minister for favourable action. A press release was issued by CODISSIA informing about the requests made.
The press release read:-
∙ To introduce new loan schemes for start-up companies
∙ To extend the limit of collateral free automatic loans for MSMEs to be provided to meet operational liabilities and restart businesses.
∙ A separate committee to be formed to analyse and set parameters for MSME companies for the ratios like DSCR ratio. DSCR compliance ratio for availing loans should be reduced for MSMEs, but currently it is maintained at par with corporates.
∙ Lending institutions insist on high credit scores and security collaterals, which many small-time borrowers don’t have. Without the knowledge of digital lending channels, MSMEs end up spending resources to meet complex eligibility factors and fill long paper trails. These cause further delays in financing and liquidity.
∙ For availing loan facilities, the margin money for micro and small scale companies to be fixed at 10% and the documentation should be simplified for the same. Also, the loan processing fee has to be waived off.
∙ Awareness on financial literacy programme that teaches entrepreneurs to better source, invest and expand financing with high return investments, since most of the industries in MSME sector comprises of small businesses without adequate knowledge and benefits about the new schemes introduced.
Banking & Financial issues
∙ Suitably instructions may please be given to the bankers not to consider the turnover achieved during the pandemic period since normally based on the turnover working capital loans are sanctioned.
∙ To increase the working capital sanction limit to 40%
∙ For the working capital limits like OCC, the margin requirement should be reduced from 25% to 10%.
GST
∙ Eligibility of Input Tax Credit to be widened industrial and factory buildings – India is on the path towards development of infrastructure. The investment in industrial infrastructure by the MSMEs will be a backbone for Indian industrial development. Therefore, construction materials used for industrial buildings by MSME units for manufacturing purposes should be allowed to take input tax credit.
∙ Reduction in the penalty charged under section 129 of the CGST Act, 2017
Where the goods in transit are not accompanied by the proper documents like Tax Invoice or E-Way Bill or Delivery note the penalty under section 129 become chargeable. Moreover, if there are defects in the documents accompanies the movement of goods, penalty under section 129 is levied. The penalty has been increased from 100% to 200% by the Finance act, 2021. Even for the minor offences like the digit change in the Vehicle Number [For example the correct vehicle number 5225, is wrongly mentioned as 5252] this huge penalty of 200% is levied. So this should be reduced to 100%.
∙ A lenient view should be taken for the unintentional mistakes committed during the 2017-18 and 2018-19.
During the initial years of the introduction of the GST, there were lot of glitches in the GST portal. But the trade industry bore the brunt of these portal issues and paid the tax due to the government. So keeping in mind these issues the following reliefs are sought.
∙ B2B sales wrongly shown in the b2c of the GSTR-1. The suppliers had shown the b2b sales wrongly in the b2c. As a result, the recipient could not get the ITC in GSTR-2A. The officers are asking to reverse the ITC with interest. This creates a huge burden for the MSME sector.
So a lenient view can be taken on this issue. If the supplier gives a declaration that he has sold the goods to the recipient and put it in the b2c table of the GSTR-1, then the officers should not insist on the reversal of the ITC by the recipient.
Many MSME units could not file the GSTR-3B due to the various issues in the GSTN portal. So there shall be interest waiver for these years.
Changes in GST Rates
∙ GST rates for Cement and Automobiles should be brought down to 18%.
∙ Government should implement three slab GST rates (5%, 10% and 15%) as at present it has SIX slabs.
Income Tax
∙ The rates of tax for in respect of companies and LLP has been reduced from 30% to 20% + Surcharge and Cess from the AY 2020-21. The MSME sector being predominantly run as sole-proprietorship or partnership and proprietorship firms have been adversely affected due to the high-Income Tax rates at 30% when compared to the reduced rates of 20% for companies. Therefore, the rate of tax for partnership firms be maintained at 20%.
∙ The maximum rate of tax for Individuals i.e. for the income above Rs.10 Lakhs, the rate of tax should be revised to 20%.
Raw Materials
Abnormal Increase in prices and non-availability of Raw Materials.
∙ Even though the Indian economy is showing signs of revival, the continuous increase in prices of all raw materials coupled with scarce supply, especially steel products and also of other allied Raw materials has dampened the mood and severely affected the recovery of many MSME industries and since MSMEs are dependent for supply of steel and allied materials on Traders who are demanding higher prices and also 100% advance payments from MSMEs.
∙ Spike in prices of Raw Materials and other allied materials leading to heavy rise in manufacturing cost in the last one year which results in non-supply at the earlier agreed rates.
∙ Efforts are being made to form a consortium of associations to purchase raw materials in bulk from the Government Organisations such as SAIL etc. but it would take time. We request the Government to initiate steps to control the raw material prices immediately.
∙ A strong Policy decision should be taken immediately for allowing import of all Raw Material at Zero Import Duty and to stop exports of all Raw Materials till the indigenous supply and prices are stabilised, to help the MSMEs.
∙ Ban should be imposed on export of all raw materials like Iron Ore, Steel, Paper, Plastics, Cotton etc. India will be able to achieve a higher rate of GDP if value added products are exported instead of raw materials. This is also in line with the vision of Make In India.
∙ SAIL yard in Coimbatore was closed in the year 2015 for the construction of Railway over-bridge. The construction was completed in 2017. Coimbatore being an Engineering Hub, reopening of SAIL yard is very much essential and we request your goodself to initiate and reopen the SAIL Yard in Coimbatore.
Warehouse for Products manufactured by MSME Units
∙ All NSIC warehouses should allow MSME’s units to stock their finished goods all over India at a subsidised warehouse charge. This would allow the MSME’s to sell their products through e-commerce portals thereby reaching the customers directly without any delay in delivery time and the payments also become hassle free.
INFRASTRUCTURE
Coimbatore is witnessing a radial development, with industries growing on the eastern and northern areas of the city, hospitality sector on the western areas and logistics on the southern areas. Therefore, we request for infrastructure development will benefit the overall industrial sector to further improve their business and thereby the GDP will considerably be increased.
∙ Focused Infrastructure upgradation in tier II and tier III cities will attract large industries and medium scale industries, lead to balanced Economy and industrial growth in the city. These Large industries can be complimented with existing MSME supply chain and workforce available. We request Government of India to allocate more funds.
Coimbatore needs to be developed as the major Industrial City and large-scale industries have to be brought within the radius of 100 kms. as Coimbatore is a hub of MSMEs.
∙ Coimbatore-Madurai, Coimbatore-Karur and Coimbatore-Hosur Industrial Corridors to be developed which will make to gain GDP double in three years.
∙ Speeding up of all on-going projects, Flyovers, up gradation of stations, modernizing Goods Terminals and Handling is urgently required.
∙ Formation of Eastern and Western Bye-pass Road/Ring Road.
∙ L&T Bypass road from Nilambur to Madukkarai (NH 544) six lane work to be initiated immediately.
∙ Cochin Frontier Road - Palladam to Madukkarai Road needs to be widened and formed as a Four-Lane Road
∙ Palladam to Chinthamanipudur Road to be widened and formed as a Four Lane Road.
∙ Sathyamangalam Road (NH 948) - An elevated road from Ganapathy (Textool) to Saravanampatti is very much essential. There is a proposal for new alignment of a single road from Saravanampatti to Bannari, which should be a 4 lane road up to Bannari, will be much useful for easy movement of vehicles going into Karnataka State.
∙ Bus port project to be developed on priority basis to reduce the road traffic inside the city limits.
∙ All Highways Roads in Tamil Nadu especially in Coimbatore, all the four lane roads should be converted into 6 lane roads and all the 6 lane roads should be converted into 8 lane roads. We request the Central Government to provide fund allocation for the above work and also the work should be speeded up.
Railways
∙ Metro Rail Projects for Coimbatore – 136 kms covering Avinashi Road, Mettupalayam Road, Trichy Road, Sathyamangalam Road and Thondamuthur Road.
∙ Additional overnight Bullet trains from Coimbatore to Chennai, Bangalore, Trivandrum and Tirunelveli is of most urgent.
∙ Additional overnight Bullet trains from Coimbatore to Chennai, Bangalore, Trivandrum and Tirunelveli is of most urgent.
∙ Suburban circular train service with Metro trains are the need of the hour for Coimbatore.
∙ Speeding up of all on-going projects, Flyovers, up gradation of stations, modernizing Goods Terminals and Handling is urgently required.
Air Connectivity
∙ Coimbatore has more than 1 lakh MSMEs. International Medical Tourism, Textiles, Software, Education Centers are growing exponentially in and around Coimbatore. Due to limited airlines, flying in and out of Coimbatore, at the current rate of flying is very expensive and not affordable for MSMEs. Hence, to consider more domestic connections from Coimbatore to Delhi, Mumbai, Pune, Ahmedabad, Kolkata and few airports in the North-East of India too.
∙ An airport infrastructure with direct flight connections to the continents like America, Europe, Africa and Australia is very important for the business development. Coimbatore must be well connected with international hubs of foreign airlines directly by international carriers immediately, which will help the passengers travel from and to different continents seamlessly.
∙ International Spokes Hub to be developed.
Airport Expansion
∙ Most of the operators like Indigo, Spice Jet, Singapore Airlines, Air Lank, Air Arabia and Emirates are ready to operate to various International Destinations. Once our Coimbatore Airport runway is expanded, wide bodied international operational aircraft can land and take off.
There will be a huge revenue if Coimbatore Airport is getting expanded soon. Coimbatore airport land acquisition process will be completed by June 2022 and we request Central Government for necessary funding for the Coimbatore Airport expansion project.
∙ Government to form a Special Purpose Vehicle to plan a state of the art international airport in an area of 4000 acres, which should have facilities to cater to 2 crore passengers, cargo complex, aircraft maintenance hangers, aerospace parks and air defence manufacturing industries that will bring development to the business people in this part of the country.