GST scores big for sports goods makers in West UP; pharma feels the pain

By: Admin
April 17, 2024
Categories: GST Recent News
4 Min Read

The view of Sharma is shared by the owners of other micro, small, and medium enterprises (MSMEs) dealing with sports goods manufacturing in the area.

“A 5 per cent GST is now levied on clothes. It is helping us since we had to bear the expense of buying untaxed fabric,” the chief executive officer of Active Sports said.

The BJP’s manifesto, titled ‘Modi ki Guarantee 2024’, promises to simplify GST compliances and laws, provide digital credit, and streamline the tax portal for MSMEs.

From GEM, another sports goods MSME in the area, praises the reduced paperwork and travel for business processes thanks to GST. “Previously, even to submit a paper, we had to travel 15 km and give money to get the work done. Now, it’s better.”

However, for pharmaceutical distributors, it is different.

Pharma distributors in Muzaffarnagar and Meerut are concerned about disrupted local trade and unexpected tax notices.

“We are being sent notices for an error of Rs 2 from four years back, which was not the case earlier,” rues a small pharma distributor with the condition of anonymity.

According to Section 43B(h) of the Income Tax Act, effective April 1, companies are supposed to pay MSMEs within 45 days of the agreement. More than 182,000 complaints were filed by small businesses to claim over Rs 42,000 crore, according to data from the MSME Samadhaan Portal as on March 31.

The highest amount was to be paid by state governments (Rs 5,886.9 crore), followed by central public sector undertakings (PSUs) (Rs 5,074.4 crore), and proprietors (Rs 3,747.7 crore).

From Quality Flavours Exports, a mint essential oils manufacturer in Moradabad, is waiting for a payment whose deadline was extended to 90 days from 45 earlier.

A brass and iron manufacturer flags the rising cost of raw materials. “We are now thinking of alternative work,” he says.

Around 60 per cent of the amount payable in disposed applications was settled by the Micro and Small Enterprise Facilitation Council as on March 31. Central PSUs had settled the highest amount, with Rs 1,075.2 crore, followed by state governments (Rs 786.5 crore), and proprietors (Rs 407.7 crore).

He highlights the government’s protection of MSMEs in their tenders and improved access to bank loans. However, the Government e-Marketplace (GeM), an online platform to procure directly from MSMEs, is a concern. “Half of our business is dependent on GeM. The portal has helped us get tenders from across India but the re-auction bid affects our profitability.”

According to a Rajya Sabha reply, MSMEs contributed 29.1 per cent to the country’s gross domestic product in FY22. It was higher at 30.5 per cent in FY20.

Source from: https://www.business-standard.com/elections/lok-sabha-election/gst-scores-big-for-sports-goods-makers-in-west-up-pharma-feel-the-pain-124041600928_1.html