With the Monsoon Session kicking off, small and medium business players seem enthused by the likeness of Goods and Services Tax (GST) Bill being passed by the Parliament. The NDA government has sought an all-party support in the passage of this long-pending bill, which seeks to create a uniform indirect tax system across country.
GST Bill is believed to give an upthrust to all businesses, especially the ones in SME sector. A simple taxation can prove to be a game changer for these small tax payers.
“The taxation problems will get a relief from the passage of GST Bill. State-wise, there might be some issue or differences that may be witnessed, but those can be addressed on the go. Over-all the bill is going to have a good impact on the SME sector”, said MSME Secretary K K Jalan, while replying to a tweet by SMEpost during TransformingIndia Live chat.
GST is critical to the growth of the economy driving SME sector, as it is largely dependent on good logistics. The bill envisions a pan-India GST to thoroughly overhaul India’s indirect tax regime.
“GST rate is expected to be uniform across India (if there is difference in rates between states, the same will be approved by the GST council and the difference will be less than 2%). Excise and sales tax, along with other taxes will be merged in to GST. Small businesses will be out of GST, they are below the threshold limit. Small businesses below a certain threshold to be decided (say up to 1.5 Crore) is expected to have a summary GST rate of 1/2% on the total turnover without input credit. Accordingly small businesses may be out of the GST or the compliance burden”, KPMG Indirect Tax Head Sachin Menon had told Media.
From starting a business to ease-of-doing it, SMEs have to go through a plethora of taxes such as State Value Added Tax (VAT), Central Excise, Service Tax, Entry Tax, etc. The proposed GST structure will uncomplicate this complex web of taxes and only the actual payable price will be paid at final point of consumption.
“Currently there is a distinction between goods and services when they are sold as a package. Companies have to pay taxes on entire underlying value of the product/service, with implementation of GST; companies in a chain will have to pay tax only on the value-addition. So, the actual tax paid will likely be small and reduce the incentive for evasion”, said KNG Agro Food Director Ssiddharth Goel.
The Bill was first mooted by the Congress-led United Progressive Alliance regime and has already been passed by the Lok Sabha. This Monsoon Session of the Parliament will be held from July 18 to August 12, with a total of 20 sittings, and gives positive vibes of the Bill being passed this time.
