GST Council Meeting: Ministerial Panel To Look Into Issues Facing MSME Sector
GST Council forms sub-committee headed by MoS Finance Shiv Pratap Shukla to look into the MSME sector’s issues.
The Goods and Services Tax Council today decided to form a group of ministers headed by Minister of State for Finance Shiv Pratap Shukla to address the various issues faced by small businesses.
“The issues related to law will be taken up by the law committee and those related to rates will go to the fitment committee,” Interim Finance Minister Piyush Goyal told reporters after the meeting. “Both these committees will deliberate on the issues and submit recommendations to the group of ministers headed by Shiv Pratap Shukla.”
The sub-committee on MSMEs will also include:
- Delhi’s Deputy Chief Minister Manish Sisodia
- Bihar Deputy Chief Minister Sushil Modi
- Assam Finance Minister Himanta Biswa Sarma
- Kerala Finance Minister Thomas Isaac
- Punjab Finance Minister Manpreet Singh Badal
The issues discussed today will be taken up in detail and presented before the GST Council. The group of ministers will submit a report in the next six weeks, Badal said.
All state representatives have tried, over the last 13 months to provide relief to the MSME (micro small and medium enterprises) sector.Interim Finance Minister Piyush Goyal
Further simplification of the GST compliance and other issues for the MSME sector should soon be in place with the formation of the ministerial panel, said Abhishek Jain, indirect tax partner at EY India.
The MSME sector saw concerns emerge due to a significant change in processes under the new GST regime.
Some of the suggestions made by representatives of the MSME sector included allowing taxpayers to increase the threshold of inter-state supplies to Rs 20 lakh without having to register under the GST. Currently, taxpayers must sign up for the tax if they make inter-state supplies even if their annual turnover is below Rs 20 lakh.
Another option being discussed was distributing half or the central government’s entire share of the GST as refund to taxpayers with a turnover of up to Rs 1.5 crore, BloombergQuint reported earlier today.
All these issues will now be discussed further before the GST Council takes a final call.
“In this country, you have a big trader who pays more tax to the government as well as several small traders. Smaller traders generate a lot of employment. Both have to be given equal importance,” Sissodia said in the same press meet. “I hope that the inputs that have come for MSMEs and even larger businesses will provide them support and not just relief.”
The council has also decided to start a pilot to promote digital transactions.
Payments made using BHIM UPI and Rupay cards will get a cashback of 20 percent of the GST amount, Goyal said, adding the cashback will be capped at Rs 100. The pilot programme will be implemented in any state that is willing to run it voluntarily.
Bihar, Gujarat and Maharashtra will be the first few states to incentivise digital payments, Sushil Modi, deputy chief minister of Bihar, told BloombergQuint.
“Incentivising of digital payments would help in maintaining a better database by the government and tracking the footprint of various taxpayers,” said EY India’s Jain.
The next GST Council meeting is likely to be held on Sept 29-30 in Goa.
GST Revenue Shortfall
The shortfall in overall GST revenue in the April-June period is Rs 43,000 crore, West Bengal Finance Minister Amit Mitra said.
GST revenue during the period was Rs 2.86 lakh crore. That compares with a rough estimate of Rs 3.36 lakh crore, derived by calculating expected monthly inflows based on budget estimates.
Watch full press conference here: