GST Council meet likely to bring relief to SMEs and exporters

Prime Minister Narendra Modi while addressing the Institute of Company Secretaries of India on the occasion of their golden jubilee celebrations, on Thursday, had said that the economy of India is on the right foot and assured that the slowing economy will be reversed soon.

The Modi government is assuring that it has the power and stability to reverse the situation and bring the economy back on track, the reality check seems to be showing that the GST experiment has shaken the grounds of the ruling government. Recently, the Modi government is receiving a lot of criticism on the declining GDP growth and the slowing economy and these issues are assumed to be a result of the GST experiment.

Fearing to lose the support of the businessmen and traders, especially in Gujarat ahead of the assembly polls due in Dec this year, the Modi government is desperate to get the economic situations back in control. While addressing the company secretaries, Modi had promised that he will soon organise the GST council to take the necessary steps required to get the situation under control and address the problems faced by the small and medium class enterprises.

Keeping up his promise the 22nd GST council meet was organised on Friday. It is most likely that during the course of the meeting the Modi government is planning to a Diwali gift to the small and medium type enterprises as they might get relief in filing the GST returns.

Two days ahead of the GST Council meet, Prime Minister Narendra Modi, Finance Minister Arun Jaitley and BJP party President Amit Shah had held a meeting. The course and details of the meeting are unclear but one thing was confirmed that to address the issues of GST and slowing economy has become the priority for the government.

The seriousness with which the government is addressing the GST issue at the earliest can be seen as, Amit Shah, who was on a three-day trip to Kerala, called off his visit earlier than scheduled to address the more important issue at the centre.

Soon after the meeting began, Uttarakhand Finance Minister Prakash Pant said that it is almost certain that the limit of composition scheme will be increased from 75 lakh to 1 crore. Small traders may be allowed to file the GST on a quarterly basis.  Small traders can also get relief in compliance with GST and it is most like that the GST may come into effect from March 2018. Besides this, the exporters can also get relief in GST.

The other issues that may be covered during the meeting are, Textile Industry may get some relief, including petrol and diesel prices under the GST slab, may be reconsidered, consideration might be given to reduce the burden on small taxpayers and registration for the composition scheme can be re-opened.

On Friday, Commerce and Industry Minister Suresh Prabhu will also meet exporters. In such a situation, a rebate may be declared for the exporters. The government can also provide some relief to increase export. Officials said that improvement in the functioning of the GST network is also likely to be assessed in the full meeting of GST.

According to the sources, the union’s Laghu Udhyog Bharti (which works among small traders) and the Swadeshi Jagran Manch had well in advance warned the government and the BJP leadership about the resentment it might have to face due to the exemption in excise duty after GST came into force.

These bodies had warned that the government may have to pay the price of the implementation of the GST during the elections as people might go against the party. They have also warned that if the rebate that the small enterprises get on the excise duty is not increased then the Laghu Udhyog Bharti and the Swadeshi Jagran Manch will also demonstrate protest against the Modi government like the Sangh workers.

Officials of the ministry said that a group of ministers has been constituted under the leadership of Bihar Deputy Chief Minister Sushil Modi to look into the disturbances in the GSTN. The group will inform the Council about the work of the portal. To look into the issues related to exporters, the Committee constituted under the chairmanship of Revenue Secretary Hansukh Adhyya may give its initial report on Friday. Based on this, the council can recommend to exporters some relief, so that their working capital, stuck in the form of a refund, can be released soon.