Rs 100-cr fund to help MSMEs decipher tech compliance

The cash will not be transferred to the companies but used to set up help desks

The government has set aside Rs 100 crore to help small-and medium-scale enterprises tide over the goods and service tax (GST) compliance issues.

The cash would not be transferred to the companies but would be used to set up help desks, awareness camps and such infrastructure that the MSMEs can utilise to solve their technology problems related to compliance, a senior MSME ministry official.

The broad contours of the scheme are still being chalked out. But the programme is expected to spread awareness about updated accounting and taxation norms among firms, another official said. A corpus of Rs 100 crore had been allocated for this from an existing scheme, he added.

The government has announced the GST rates for a large number of items under four slabs. Most companies in the sector are more worried over the new rules of business they need to comply with. These include the government’s decision to reduce the tax exemption limit for small-scale industry units from Rs 1.5 crore to Rs 20 lakh, as well as the phase-out of central value added tax credit from September. After industry’s opposition, these issues are under discussion.

“We are in talks with the government on a number of these rules which need to be finalised soon,” said Om Prakash Mittal, national president of industry body Laghu Udyog Bharti, “especially as compliance norms are getting much stricter and the majority of the sector is entering the taxation fold for the first time.”

Currently, the government recognises micro enterprises as those with less than Rs 25-lakh investment in plant and machinery. Small and medium enterprises are those with similar investments less than Rs 5 crore and Rs 10 crore, respectively.

The provision introducing taxation of stock transfers had invited opposition from MSMEs, who had complained this would stretch their meagre working capital even further.