Micro, small and medium enterprises (MSME) are trying to assess the full extent of the goods and services tax (GST) regime over their businesses, as some crucial rules of operation are still unclear.
Though the government has unveiled GST rates of a significant number of items, a majority of companies in the sector are worried about the new accounting and taxation norms that have been opposed by industry and are being discussed. These include a decision to reduce the tax exemption limit for small-scale industry units from Rs 1.5 crore to Rs 20 lakh, as well as to phase out central value added tax (VAT) credit from September.
“We are in talks with the government on a number of these rules which need to be finalised soon, especially as compliance norms are getting much stricter and the majority of the sector is coming under the taxation umbrella for the first time,” Om Prakash Mittal, national president of MSME network Laghu Udyog Bharti, said.
Currently, the government recognises micro enterprises as those with less than Rs 25 lakh investment in plant and machinery. Small and medium enterprises are those with investments less than Rs 5 crore and Rs 10 crore, respectively.
via Changing rules of business post GST worry MSMEs | Business Standard News
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