NEW DELHI: The GST relief given to small and medium enterprises (SMEs) and exporters will have a positive impact, industry body SMERA said recently.
The GST Council recently raised the threshold turnover for the composition scheme that allows SMEs to pay 1-5 percent tax, without going through cumbersome formalities. The composite scheme for small businesses, which was applicable for turnover upto Rs 75 lakh has now been extended for gross turnover upto Rs 100 lakh.
Further, businesses with turnover upto Rs 150 lakh have now been allowed to file returns and pay GST on a quarterly basis, instead of a monthly basis.
"The measures will have a positive impact in these three different ways," SMERA, a joint initiative of SIDBI, D&B and leading public and private sector banks in India, said in a release in New Delhi.
It listed the benefits of the GST relief as: "Simplification of tax structure and minimisation of compliance costs for small businesses; evolution of an alternative GST mechanism for exports to ensure that SME exporters don't face liquidity or working capital pressures, and revision of tax rates for some unbranded common products to improve the competitiveness of those MSMEs who manufacture and distribute them."
Sankar Chakraborti, CEO of SMERA Ratings said: "This implies that the compliance burden and its costs for small entrepreneurs and enterprises would reduce significantly. Such a simplification of the taxation structure for small businesses will also lead to an increase in the taxpayers' base and improve compliance."
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