Due to shortfall in the GST revenue, the Government is likely to drop the move to grant relief to the micro, small and medium enterprises ( MSME s), reports said.
It was reported that till the next elections, the GST structure might not see any major change, sources said, adding that even the new return filing system may have to wait till the polls are concluded and the new government assumes office.
The Government assumes that the proposals to MSMEs, including one to refund a portion of the taxes paid by these units to reduce their tax liability without upsetting the GST chain would create technical hassles.
GST collections for July came in at `93,960 crore, down 2.5% from the receipts in the previous month and reversing the recent trend of a gradual month-on-month increase in the mop-up. The rate cuts for 88 items and 24 services announced on July 21 to give relief to MSMEs and customers did have an impact on the collections. The impact of the rate cuts could be more pronounced for August.
The Special meeting of GST Council held on 4th August, was aimed to discuss the issues of the MSMEs. 157 issues were submitted before the Council.
While addressing the media after the meeting, the Finance Minister Piyush Goyal said that several issues related to small businessmen and retailers were discussed in the meeting. He said that the GST council has decided to form a sub-committee under the leadership of Shiv Pratap Shukla, Minister of State for Finance. Delhi Minister Manish Sisodia, Finance Minister of Punjab & Finance Minister of Kerala will be a part of this committee. The committee will study the issues and make recommendations to ease the issues of MSMEs.
However, the panel hasn’t met even once since.
Three panels of tax officials — law, fitment and IT — are tasked with assisting the GoM but even these have only met once each and that too without any major outcome.
As the council meets here on September 28 for its 30th session, it’s unlikely to have an interim report from the GoM for consideration.
“Tax officials and the political dispensation are wary of implementing new measures close to general elections. Apart from revenue considerations, we also have to factor in the IT-related issues that may arise after implementation,” a source said. As FE reported earlier, due to similar apprehensions, the government will likely defer the new return-filing system, crucial to check evasion, to after the general elections.
