GST Compliance for MSMES: Dr Amit Mitra, Principal Chief Advisor to West Bengal Chief Minister Mamata Banerjee on Monday requested Finance Minister Nirmala Sitharaman for a GST Council meeting to discuss alleged proliferation of GST frauds across the country and problems being faced by MSMEs because of a web of regulations, PTI reported.
Previously served as the State Finance Minister, Mitra referred to the central government’s data on the frauds detected from GST invoices amounting to Rs 1.15 lakh crore between 2018-19 and 2022-23.
“I write this letter with great anguish and deep concern. On one hand, GST frauds are proliferating across the country penetrating every state. On the other, the web of regulations is so overpowering for the MSMEs, that they are on the verge of deregistering back to their informal status,” Mitra said.
He said that ‘humongous’ GST fraud and MSMEs’ suffering in the current GST system need a complete rethink by the Centre and the GST Council on the structure and GST.
In the letter, Mitra also added that out of 69,426 GST Identification Numbers verified during the last two months, 20,893 were found to be non-existent while GST evasion found during that period amounted to Rs 19,638 crore.
Citing the complex web of GST thrust upon MSMEs, Mitra highlighted that so far 770 notifications have been issued.
“The rates of more than 400 items of goods and around 100 categories of services have been changed to date. How do you expect that an MSME company would be able to cope with this gargantuan regulatory structure?” he said, according to the PTI report.
Mitra noted that while the GST was to get entrepreneurs in the informal sector to the formal sector via a simple and transparent GST system, unfortunately, 90 per cent of the GST was contributed by large taxpayers who can cope with this complex web of regulations.
He called for the GST Council to meet to “exclusively focus on these two big issues, rather than tinkering with the nitty-gritty, to find holistic and sustainable solutions to control frauds & simplify regulations, keeping the MSMEs in mind.”