GST Reforms: Boosting India’s MSME Sector

editor — Fri, 14 Jun 2024 05:01:35 +0000

The Global Trade Research Initiative (GTRI) emphasized the importance of implementing crucial reforms in India’s customs duties, GST, and commerce to drive sustainable development and inclusive growth. According to GTRI, these reforms are essential as India stands at the threshold of a transformative period, necessitating comprehensive economic changes.

GTRI highlighted several key recommendations. Firstly, it advocated for simplifying India’s complex customs duty structure, which has not been reviewed in two decades and currently encompasses over 27 different duty rates and numerous duty slabs. They proposed reducing the average import tariff significantly, potentially below 10%, while ensuring essential products remain unaffected. This, they argue, would not only streamline operations but also mitigate global criticisms regarding India’s tariff policies.

Secondly, GTRI proposed substantial reforms in the GST framework, suggesting an increase in the exemption threshold from ₹40 lakh to ₹1.5 crore annual turnover for MSMEs. They reasoned that this adjustment could benefit over 80% of registered firms while simplifying compliance through invoice-matching and reducing instances of tax evasion.

Thirdly, GTRI cautioned against incentivizing low value-added electric vehicles (EVs), emphasizing the risk of increased dependence on Chinese-manufactured EVs due to their dominance in battery and component supply. They recommended a balanced approach that promotes EV adoption while safeguarding India’s domestic auto industry.

Moreover, GTRI underscored the need to bolster India’s capacity in producing key pharmaceutical ingredients domestically to reduce reliance on imports, particularly from China, which currently supplies a significant portion of India’s APIs and biosimilars.

Lastly, GTRI suggested simplifying e-commerce export regulations to stimulate exports from India, particularly for sectors like handicrafts, jewellery, and traditional products, aiming to tap into global markets more effectively.

In conclusion, GTRI’s proposals aim to position India as a resilient and globally competitive economy through strategic reforms in customs, GST, and commerce, fostering sustainable growth and economic inclusivity.

Source: https://www.business-standard.com/economy/news/reforms-in-customs-duties-gst-commerce-to-push-india-s-growth-gtri-124061300323_1.html

Trade Body Urges New Government to Simplify GST System

editor — Thu, 06 Jun 2024 09:40:19 +0000

The Agro Food Chamber of Commerce and Industry has called on the incoming central government to address the numerous complexities associated with the Goods and Services Tax (GST) system, which have long been a source of frustration for traders.

In a recent statement, the chamber’s president highlighted that despite multiple appeals from various trade organizations across the nation, the previous administration failed to resolve the issues plaguing the GST framework. “Originally introduced to eliminate ‘tax terrorism,’ the GST system has ironically become a source of such terror itself, forcing many traders, particularly in the Micro, Small, and Medium Enterprises (MSME) sector, out of business,” he remarked.

The president further criticized the neglect of MSMEs, which are responsible for generating 40% of the country’s employment, while the needs of large corporations were prioritized. This oversight has led to the closure of many MSME units, exacerbating unemployment, he added.

Discussing the drawbacks of single-party dominance at the Centre, he noted that states governed by opposition parties often faced discriminatory treatment. “For example, longstanding requests like upgrading Madurai airport to international status and accelerating the construction of Madurai AIIMS were ignored by the previous government,” he pointed out.

Additionally, he emphasized the necessity for the new government to address agricultural issues. Immediate action is needed to rejuvenate tanks, lakes, and ‘kanmois’ by desilting them, as inadequate water storage has been a primary factor in the reduced yields experienced by farmers, he concluded.

Source: The Hindu

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GST Reforms: Boosting India’s MSME Sector

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Trade Body Urges New Government to Simplify GST System

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