A senior State government official tasked with revenue collection on Wednesday said unorganised business sector was reeling under the effect of Goods and Services Tax (GST).
The impact has been different on the unorganised sector, Principal Revenue Secretary Somesh Kumar said, pointing out that GST has been very positive to the organised sector.
Addressing a national conclave on GST organised here on Wednesday by industry body Assocham, he said benefits for businesses in the new tax regime included minimisation of cascading taxes and seamless flow of input tax credit helping set off several overhead expenses.
The logistics and distribution sector has massively benefited, he said, citing an ICRA report that mentioned a 20% reduction in the turnaround time of trucks and a robust growth of warehousing sector by 2021.
On measures initiated to benefit the small and medium enterprises, Mr. Kumar counted an increase in the registration threshold to Rs. 20 lakh and composition threshold to Rs. 1 crore as well as allowing for quarterly GSTR-1 return for entities with turnover up to Rs. 1.5 crore.
“The SMEs were promised that they will not be affected. But on the whole, this sector needs more support,” he said.
The challenges ahead, Mr. Kumar said, were bringing petroleum, electricity and land and immovable property under GST. “They need to come ultimately under GST, but it’s a long way to go and we cannot think of it now,” he added.
Chairman of Assocham’s National Council on Indirect Taxes, Nihal Kothari, said there was an urgent need for simplification of the returns, specially for SMEs, to improve compliance.