Union Budget 2021 Expectations for MSMEs: The Central Board of Indirect Taxes and Customs had recently notified that enterprises with over Rs 50 lakh in monthly turnover will be levied at least 1 per cent of their GST liability in cash as it looked to address the issue of fake invoicing.
Services offered by legal professionals, chartered accountants, architects, courier services, management consulting and services including HR, marketing, supply chain management, etc., attracts 18 per cent GST.
Union Budget 2021-22 Expectations for MSMEs: In order to encourage MSMEs to leverage professional services for business growth, the government should reduce the GST rate on most of the professional services from 18 per cent currently to 5 per cent, Chandrakant Salunkhe, President, SME Chamber of India and Startups Council of India told Financial Express Online. Services offered by legal professionals, chartered accountants, architects, courier services, management consulting and services including HR, marketing, supply chain management, hosting and IT infrastructure provisioning, maintenance, repair and installation services, etc. attracts 18 per cent GST.
Amid the latest move by the government with respect to GST, the Central Board of Indirect Taxes and Customs had in December 2020 had notified that enterprises with over Rs 50 lakh in monthly turnover will be levied at least 1 per cent of their GST liability in cash as it looked to address the issue of fake invoicing. “With every passing day, GST laws are becoming more draconian instead of being simplified. The time limit of allowing GST registration has also been increased with a requirement of physical verification of office address by the GST officer. GST officers have also been provided additional powers to cancel GST registration in several cases,” Alok Patnia, Managing Partner, TaxMantra Global had written in Financial Express Online on Wednesday. The 1 per cent GST liability, however, would not be applicable not apply for firms whose managing director or partner have paid over Rs 1 lakh in income tax or has got over Rs 1 lakh in refund in the preceding financial year for unutilised input tax credit.
Among other key suggestions made by Salunkhe, who has over 90,000 MSME members at the SME Chamber of India, was that the collateral-free loan limit should be enhanced by the government to Rs 5 crore for micro-units, Rs 15 crore for small businesses, and Rs 35 crore for medium businesses. “This will lead to better utilization of money available with banks and needy businesses will benefit,” he added. Under the CGTMSE scheme, which provides credit guarantee to financial institutions to provide collateral-free loans to small businesses, the government had enhanced the loan disbursal limit from Rs 1 crore to Rs 2 crore, former MSME Minister Giriraj Singh had said in February 2019, according to a statement by the ministry.