Nirmala Sitharaman, the Union Finance Minister, disclosed to the media that attempts are being made to further simplify GST in future. To make life easier for GST registered businesses in India the government is making necessary efforts. Ever since GST implementation there are reports of problems with the taxation system.
GST Simplification
Government to take action on GST simplification and improvement. The finance minister stated that errors and lapses in filing returns are being identified. The improvement in the online filing of GST is an ongoing process and actions are being taken in continuity in this regard.
The Government plans on a single monthly return instead of current filing of GSTR1 and GSTR3B. Businesses with annual turnover less than 5 crore may file quarterly returns soon. Further, government plans on introducing a fully automated GST Refund system to ease working capital issues for exporters.
Currently, businesses need to raise a separate e-way bill and furnish the same details while filing GSTR1. Government plans on a central system for entering invoice details. This will tackle fake invoice issue and also multiple invoice entering in different portals.
India Ease of Doing Business Ranking
India has managed to improve by 14 places in the World Bank’s report of Ease of Doing Business 2020. It now ranks 63rd out of 190 countries and strives to get in the top 50 countries in the coming years. It is an essential step in a business and therefore special efforts need to be taken. India improved its position from 142nd to 63rd on the index in five years and seeks to progress further.
Efficient implementation of Insolvency and Bankruptcy Code (IBC) helped in improving India’s business ranking. Further, she mentioned the role of states in upgrading parameters like providing electricity and registering property. The country did well on paying taxes like GST, registering property and trading across borders. However, its performance on getting credit, protecting minority investors and enforcing contracts in mediocre.
Impact on MSMEs
MSMEs are facing many issues due to complications in filing GST returns. Many companies reported issues relating to input tax credit. Further, working capital issues due to late refund of GST is further taking a toll on MSMEs.
Chief Economic Advisor, Krishnamurthy Subramanian, stated that the banks’ present approach to provide credit has improved the credit access to MSME’s. According to reports, one lakh MSMEs have been issued loans of Rs 5500 crore. Similarly, a loan worth Rs 4600 crore (three lakh loans) has been directed to the agriculture sector. In total Rs 80,000 crore loans have been sanctioned, 43% of which is a new term loan.
To conclude,