Trade body (CAIT)& Tally raise concern on GST law, affecting Small businesses
Posted OnMarch 14, 2017 by Anish S
The biggest indirect tax transformation ‘GST’ will be upon us in a few weeks from now. The law makers are deliberating on the specific clauses and contours of it – so that the appropriate legislations can be passed. The Confederation of All India Traders (CAIT), the umbrella association for traders in the country &Tally Solutions Private Limited, a premier Indian software product company though extending their full support to GST, raise their concern ofthe impact on certain clauses of the GST Law on the Small Businessman.
More than 6 million businesses are due to fall under the GST net. Most of these people come from the SME community who are also key contributors to economic growth. These businesses suffer from uneven cash flows but are largely compliant. If availability of input tax credit is linked to payment of tax by their supplier, it will worsen the situation of these small businesses.
Speaking on the concern, Mr Praveen Khandelwal, Secretary General of the Confederation of All India Traders (CAIT) further added, “We are happy that the GSTC has cleared the way for the new law to get implemented. The trading community and other small businesses will benefit from the single tax regime undoubtedly. However, the provisions in the law to do with input tax credit availability if not corrected will be detrimental to their survival. On behalf of the entire trading community, we urge the Finance Minister to remove this roadblock so that GST can be a great law for all.” CAIT National President Mr. B.C. Bhartia said that Input credit is the heart & soul of GST &therefore its smooth passage will encourage more & more traders to comply with the law efficiently.
Mr. Bharat Goenka, MD, Tally solutions further added, “There is no doubt that GST will be one of the great levellers in the market, and open out the Indian market for the businessman. There are however certain provisions in the model GST law that will destabilize the SME community in the country. These provisions to do with ‘input tax credit available to buyer only if supplier has paid tax inside a given window’ and the even more frightening provision of the Government intending to make public a ‘Compliance Rating’ for all businesses will worsen their cash flow problems which are already uneven in nature and drive them to closure. There is a dire need to delink payment with the availability of input credit and GST is capable of providing that because it brings a lot of transparency being technology led thus giving tremendous security and protection against tax evasion.”
Under proposed GST law, input credit against the taxes paid by the purchaser can be availed only if the seller deposits the said tax with Government treasury. In the event of non- compliance at the end of seller, it is the purchaser who will be denied input credit. It is an anomaly which needs to be looked into for a smooth transition to the GST regime for businesses.
About Confederation of All India Traders:
Confederation of All India Traders (CAIT) was founded in 1990 with the idea to constitute a national forum to handle problems of Traders and render effective service to them. CAIT is an apex body of trading community of India at the national level having more than 40 thousand trade federations, associations & chambers all over the Country as its affiliates. It aims to create a business friendly environment in the Country beside upgrading and modernizing existing format of retail trade and development of skills of the traders in India and to create a conducive business atmosphere where traders can have better business opportunities.
More information available on www.cait.in
About Tally Solutions:
Tally Solutions Pvt. Ltd. is a pioneer in the business software products arena. Since its inception in 1986, Tally’s simple yet powerful products have been revolutionizing the way businesses run. Having delivered path breaking technology consistently for more than 3 decades, Tally symbolizes unmatched innovation and leadership. Today, it caters to millions of users across industries in 140 countries and continues to be the unchallenged industry leader in the enterprise resource planning software domain.
To know more Log on to: www. tallysolutions.com
To know more about GST related events and updates you could also be tuned on blogs.tallysolutions.com and download the Tally for GST App from the Playstore and App store.