Policy Initiatives for MSMEs under GST

The Government of India has taken various policy initiatives to support and promote Micro, Small, and Medium Enterprises (MSMEs) under the GST regime. Some of these initiatives are:

Increase in the threshold limit:

The threshold limit for MSMEs to register under GST was increased from Rs. 20 lakhs to Rs. 40 lakhs for goods and Rs. 10 lakhs to Rs. 20 lakhs for services. This has reduced the compliance burden on small businesses.

Composition scheme:

The Composition Scheme was introduced under GST, which provides for a simplified tax regime for small taxpayers with an annual turnover of up to Rs. 1.5 crore. Under this scheme, taxpayers can pay tax at a lower rate and have to file quarterly returns instead of monthly returns.

Refund of input tax credit:

The refund of Input Tax Credit (ITC) can be claimed by the taxpayers for taxes paid on inputs used in the manufacture of goods or the provision of services. This helps MSMEs to reduce their cost of production and increase their competitiveness.

Easier compliance:

The GST regime has simplified the compliance process for MSMEs by introducing a common electronic portal for registration, filing returns, and payment of taxes. This has made compliance easier and reduced the compliance cost for small businesses.

Technology support:

The GSTN (Goods and Services Tax Network) provides technology support to taxpayers for GST compliance. This has made it easier for MSMEs to file returns, claim refunds, and track their compliance status.

MSME Conclave:

The government has organized various MSME Conclaves across the country to create awareness about GST and to address the concerns of MSMEs. These conclaves provide a platform for MSMEs to interact with government officials and industry experts and to discuss issues related to GST compliance.

These policy initiatives have helped MSMEs to cope with the challenges of GST implementation and have enabled them to benefit from the opportunities provided by the GST regime.