Economy

GST rollout: On-boarding tax network, cash crunch top SMEs’ worries

Our Bureau Coimbatore | Updated on January 12, 2018 Published on June 11, 2017

Panellists at BusinessLine’s ‘GST and its impact on SMEs’ conclave, in Coimbatore on Saturday. (From left) SIEMA’s V Krishnakumar, Zoho Corp’s Prashant Ganti, Deloitte’s PS Krishnan, BusinessLine Research Bureau’s Lokeshwarri SK, Central Excise Dept’s N Ramkumar, Codissia’s V Sundaram, and Lakshmi Vilas Bank’s A Shankar

But new tax regime seen improving ease of doing business after initial hiccups

While the panellists at a conclave on ‘GST and its impact on SMEs’ were in agreement on sticking to a July 1 GST rollout agenda, views varied on its impact on trade.

And from the discussions that followed, it was apparent that the participants’ apprehensions were not as much on the GST rate slabs as they were about getting on board the GST Network (GSTN) portal. There were also concerns on the perceived cash crunch that the trade and industry would encounter around the time of the rollout and the subsequent months.

That the GST regime is starting within months of demonetisation is adding to the unease. The programme was organised by BusinessLine in association with Lakshmi Vilas Bank and Zoho Books and powered by Codissia and Market of India.

Technology partner Zoho informed the participants about the technology support/solutions it will offer MSMEs in the online return filing process. Prashant Ganti, Head (Product Management – Accounting and Payroll Solution), hailed GST as a move that will unify taxes and help control tax evasion.

IT backbone

“Nearly 300 crore invoices will have to be uploaded. As all the information pertaining to a transaction has to be fed online, it is expected to open up opportunities for software developers, but the success ultimately would depend on a strong IT background. There are a number of solutions/applications; the choice of picking the right solution is in your hands,” he said.

N Ramkumar, Deputy Commissioner, Central Excise, Coimbatore, said the department has been conducting awareness campaigns at regular intervals. A GST Seva Kendra has also been set up at the divisional office to educate customers and clarify their queries, he added.

PS Krishnan, Director, Deliotte, and a tax consultant, urged the participants to ensure that their vendors also pay the tax and file their returns — else they would have to take on their (vendors’) tax burden as well.

“Further, in GST, the concept of manufacturer and trader will cease to exist. All transactions will boil down to ‘supply’,” he pointed out.

Codissia (Coimbatore District Small Industries Association) President V Sundaram said exports, tax free right now, will come under the purview of the levy under GST.

The exporter can pay and claim refund, which may cause some disruption in the cash flow.

A Shankar, Senior Vice-President and Head, MSME and Rural Banking, Lakshmi Vilas Bank, urged trade to tread with caution.

Conceding that the transformation period could be painful, both for the industry and banks, he said: “Eventually every transaction will come on a clean slate and this will enable the lending institutions to extend credit.”

He appealed to those within the ₹20-lakh turnover bracket to register themselves (though it is not mandatory for such vendors/suppliers), lest they lose business.

SIEMA (Southern India Engineering Manufacturers’ Association) Vice-President V Krishnakumar did not hesitate to admit that the majority of MSMEs are reluctant to imbibe technology.

IT issues often cause hardship to the buyer, seller and logistics provider as well, he said, adding: “This makes us doubt if the GSTN will be capable of taking on this load.”

Central Excise’s Ramkumar immediately stepped in to assure that the system has been designed to take care of such issues, though he too did not rule out teething troubles.

Raghavan Srinivasan, Editor, BusinessLine, inaugurated the event, while Lokeshwarri SK, Head, BL Research Bureau, moderated the programme.

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on June 11, 2017
null
This article is closed for comments.
Please Email the Editor