For security reasons, your session has been timed out. To continue, Please login.
Finance Minister Piyush Goyal on 1st Feb 19 announced a 2 per cent interest subvention for MSMEs that have taken a loan of Rs 1 crore. The government will make it mandatory to source 25 per cent from the SME sector.
The MSME sector has a lot to cheer from the recent changes in the Goods and Services Tax regime based on the 32nd GST Council meeting dated 10 January 2019 and being reiterated in the Interim Budget 2019. The service sector accounts for over 55 per cent of the GDP, which was not covered by composition scheme earlier. It is also proposed to increase the basic exemption limits for registration as well as the maximum turnover limit for the composition scheme. MSME sector covers 90 per cent of the businesses by volume and is a pivotal sector for India. These proposed reforms will greatly improve the ease of doing business as most of the small and medium sized businesses are not fully equipped to meet with the complex GST regulations, filing of tax returns, claiming input tax credits, etc. The three mega changes proposed in this respect are as follows:
A scheme of sanctioning loans upto Rs 1 crore in 59 minutes has been launched. GST registered SME units will get 2% interest rebate on incremental loan of Rs 1 crore.
It is proposed to increase the threshold limit for exemption from registration and payment of GST to Rs 40 lakh and Rs 20 lakh (for Special Category States). Currently, all businesses with a turnover of up to Rs 20 lakh are exempt from GST registration, while the limit for Special Category States is Rs 10 lakh.
The GST composition scheme, under which intra state suppliers of goods pay tax at a flat rate on the turnover (generally 1 per cent), can now be availed by businesses with a turnover of up to Rs 1.5 crore as against the earlier limit of Rs 1 crore. It is proposed to increase this turnover limit with effect from February 1, 2019 (as per recommendations of the GST Council). Suitable notification is, however, awaited in the said regard.
A composition scheme shall be introduced for supplier of services having a turnover of up to Rs 50 lakh. The service providers opting for composition scheme can pay tax at a rate of 6 percent (CGST 3 per cent + SGST 3 per cent) on their turnover and would not be eligible to avail any input tax. The said scheme shall be applicable across all service providers. The service providers covered under the Composition Scheme shall be required to file 1 annual return and make quarterly payment of GST. Suitable notification is, however, awaited in this regard.
Renewed Focus on Internal trade DIPP renamed to Department for Promotion of Industries and Internal trade.
The requirement of sourcing from SMEs by government enterprises has been increased to 25%. Of this, the material to the extent of at least 3% will be sourced from women owned SMEs.
FundsTiger is an Online Lending Marketplace where you can search for and avail Fast and Easy loans from almost all the leading Banks and NBFCs. You can Apply for Loans with Best possible Rates of Interest and terms for Personal Loan, Business Loan , Home Loan and Car Refinance Loan.