How can MSMEs achieve successful implementation of GST?

Micro, small and medium enterprises (MSMEs) are the backbone of the Indian economy. <br /> While a majority of the MSMEs were earlier outside the purview of excise, the enactment of GST has broadened the taxpayer base and brought a majority of MSMEs under its regime. <p><span style="font-weight: bold;">Vaibhav Sankla, Managing Director, H&amp;R Block India</span>, lists the major benefits to MSMEs being brought under the GST ambit: <br /> </p> <ul> <li>It will ensure seamless flow of input tax credit and hence avoid any tax being part of the cost, which will finally result in reduction of prices. </li> <li>The sale of MSMEs will increase as they will be a part of the input tax credit chain and avoid any double taxation; hence the sector will be competitive and grow manifold under the GST regime. </li> <li>Under GST, payment is to be done electronically, which will ensure transparency and every information can be obtained on a single click.</li> <li>A 'GST compliance rating' has been introduced, under which, a company will be ranked on </li> <li>a scale and it is proposed that refund will be made on percentage basis of these ratings. Hence, if an MSME is making timely compliances, its refund process will be speedy.</li> <li>Under GST, no entry tax will be charged on goods sold in any part of the country; hence, the logistic cost will reduce considerably and it will ensure speedy delivery of goods. </li></ul> <p>However, the implementation of GST is putting a lot of pressure on SMEs as they are facing several challenges in terms of in-depth technical know-how, expertise to deal with online systems and managing the compliance rating, which would assign ratings to businesses based on their obedience, which means they will have to ensure they are compliant with all norms to get a good rating. 'Here, GST solution providers play an important role as they can bring about a seamless transition to the new tax regime,' says Sankla. 'They can ensure that the SMEs are getting registered, managing compliance, liaising with the tax department and reconciling tax returns. For example, H&amp;R Block India will provide end-to-end GST compliance assistance to hosts of Airbnb and provide a GST compliance manual to make them aware of the intricacies involved in GST implementation.'</p> <p> - <span style="font-weight: bold;">SERAPHINA D'SOUZA</span> <br /> </p> <p>To share your perspective on current industry happenings, write in at feedback@ConstructionWorld.in</p>