Laghu Udyog Bharati has called for preferential treatment of micro and small enterprises with turnover of less than Rs 2 crore, urging the government to put them under zero duty structure of GST.

“We want GST to be modified. We are not satisfied with GST in the present form. The government should come up with amendments to remove its drawbacks,” National President of Laghu Udyog Bharati O P Mittal told.

He said micro and small industries have been availing of excise exemption for the past 30 years, under which the turnover limit was raised to Rs 1.5 crore in 2006-07.

“However, under the GST regime, the government has set a threshold of Rs 20 lakh turnover for excise duty exemption in this era of inflation,” Mittal said.

Other alternatives as suggested by the body are that the tax rate under the CGST Act should be made zero for MSEs up to a turnover of Rs 2 crore so as to compensate for the current exemption of excise duty.

It also suggested that refund provisions should be introduced for CGST amount collected on a quarterly basis or the Composition Scheme for micro and small scale manufacturers should be enhanced to Rs 2 crore of aggregate turnover.

“GST is supposed to bring in ease of doing business for all the sectors, but the complex structure of filing of returns, the draft rule of E-way bill and accounts and records etc are definitely going to hamper the growth of this sector,” Laghu Udyog Bharati said in a statement.

“Hence, keeping in mind the smooth implementation of GST, the micro and small enterprises should be allowed to file all the details in one return, i.e. the details required in GSTR- 1, GSTR-2, GSTR-3 should be clubbed in one return,” it said.

It pushed for exemption in relation to penal, inspection and survey provisions for the MSEs up to a turnover of Rs 2 crore at least for the initial three years.

The RSS-backed body demanded that the government make efforts to get the Small Factories Bill passed in Parliament at the earliest, saying it will benefit the micro and small industries immensely and facilitate ease of doing business.

Referring to the recommendations of the one-man committee headed by former Cabinet secretary Prabhat Kumar on the MSME policy framework, Mittal said the incentives extended under the priority sector tag should not be applicable to medium industries if their turnover is up to Rs 25 crore as per proposed definition.

Moreover, as per the new definition, the medium scale industries should be brought under the commerce and industry ministry or the heavy industry ministry, he suggested.

Under the definition of medium scale units proposed by the panel, manufacturing units having a turnover between Rs 7 crore and Rs 25 crore should be categorised as medium enterprises whereas in the case of service units, the medium scale industry should be classified as units with an annual turnover between Rs 4 crore and Rs 15 crore.

Source: DNA