: In its present form, the Goods and Services Tax (GST) will hurt the micro, small and medium enterprises (MSME) the most and would go against the Centre’s stated objective of improving the ease of doing business and giving the Make in India campaign a fillip, according to the All India Manufacturers Organisation (AIMO).
“While GST is good and needed, in its current form, it is likely to lead to more hardships than benefits for the manufacturing sector,” K.E. Raghunathan, national president, AIMO, said in a press conference.
The proposed tax structure includes a Central GST, a State GST and an Interstate GST.
“Given the current structure, if a person does business in three States, he has to get six registrations and make a number of regulatory filings.
“This goes against the GST’s aim of one nation, one tax,” said S. Srinivasan, chairman of Tamil Nadu State Board of AIMO. Unified registration for each enterprise would ease the pain, he added.
Mr. Srinivasan also said that businessmen would pay irrespective of the tax rate.
“However, how that tax should be shared should be the headache of the Centre and States and not the businessmen,” he said.
According to him, a business having a turnover of Rs. 500 crore and having an expenditure of Rs. 300 crore should be able to easily avail credits to adjust for the expenditure. However, the current GST regime does not allow for credits to be availed easily.
Mr. Srinivasan also said even advance paid for supplies were treated as tax and this would affect the capital goods industry as well as small and medium enterprises.
The AIMO has urged the Centre to look into these issues and make GST a more effective tax system.
‘Even advance paid for supplies is treated as tax and this will hit the capital goods industry and SMEs’
