Budget 2022 Expectations: MSMEs expected to cut GST, TDS, relaxation in compliance

New Delhi: Finance Minister Nirmala Sitharaman will present the Union Budget on February 1, 2022. Micro, Small and Medium-sized Enterprises (MSMEs) are requesting the government to pay special attention to the recovery of this sector, reduction in GST, relaxation in compliance, etc. Addressing the issue of delayed payments, and ease of access to capital, among others.

Rahul Raj, Founder and CEO, Flowbiz, said, “We expect the government to pay special attention to the MSME sector to help them improve and accelerate overall economic growth. This may come in the form of funding support to NBFCs to maintain liquidity and promote financial inclusion with special focus on MSMEs under priority sector lending. In addition, reduction in GST rates and relaxation in compliance burden of taxes, audit and loans for MSMEs will help the sector regain its lost momentum. ,

Dr Arun Singh, Global Chief Economist, Dun & Bradstreet also listed out several demands of the MSME industry. Speaking on the issue of delayed payments, he said, “Since the launch of the MSME solution in October 2017, only 22% of the applications have been either settled or mutually settled. While 21% of the applications have been rejected, 57% of the applications are either currently under consideration or are yet to be seen by the Council.

Urging for ease of access to capital, Singh said that the government should take measures to make the Fund of Funds scheme operate on a fast-track mode. He also suggested strengthening the export infrastructure. “Exporters should be encouraged to use trade information portals as the chances of a firm exporting to new markets increase by about 0.1% with each additional day spent on such portals,” he added.

Meanwhile, Bluecuts CEO Gunish Jain said, “TDS has been a concern across the industry. Currently, a TDS of 10% assumes a profitability of 40% which is generally not the case for corporations. With the portion being held back as TDS, maintaining large cash flows becomes a challenge. SMEs find it challenging to secure loans as most of their money is blocked as TDS by the government. In my experience , TDS needs to be reduced below 7.5% for all while it should be further reduced to 2.5% for SMEs.”

He further adds, “Even among exporters, cash flow remains a problem when it comes to GST refunds. The current process of collecting and then refunding leads to massive cash flow issues in the industry. I believe that the government should revise the existing GST refund timeline and put in place a mechanism to automatically refund the money within 45 days of a filed request. In addition, fixing a refund date can help companies align their business objectives accordingly. ,

Also, Avneet Singh Marwah, CEO, SPPL, exclusive brand licensee of Bloupunkt in India, said, “As we go through another wave, it is a sign of how important a self-reliant India is. To boost Indian manufacturing and MSMEs, we need a stable GST tax slab. No product should be above the 18% slab, and they should now encourage consumerism to improve market sentiment.” Also read: Budget 2022: Rs 50,000 WFH bonus expected for salaried class; Tax Slabs, Standard Deduction Changes

Doing so could make India the world’s third largest market for television. The market size can grow by 15% every year, reaching 16 million units. We urge the government not to change any customs duty for the time being, as the industry is moving towards stable conditions,” Marwah said. Read also: Digital payments register 40% annual growth at end-September 2021: RBI data

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