The Expectations From The 2021 Budget To Revitalize Small Businesses In India

India's Budget Likely To Raise Spending To Revive Economic Growth ...

The Micro, Small and Medium Enterprises are an important segment in the Indian industry as they employ 111 million people, their contribution to GDP is 29%, and exports 49%. The 63.4 million small businesses are growth drivers of the Indian economy.

However, due to an economic slowdown that has impacted the country, followed by the lockdown this year, small businesses need steps to accelerate their growth and solve the liquidity crisis they are suffering from.

Expectations From the 2021 Budget

To ensure that they perform at their optimal level, contribute to the economy, and employ more people, there are certain expectations that small businesses have. They are:

Payment Act for Delayed Payments

To help small businesses deal with the problems of delayed payments, MSME Samadhaan was introduced. This was a monitoring system for delayed payments. However, an article in the Financial Express highlighted the actual performance of the scheme. Not even 10% of the 32,385 cases were cleared.

The MSME sector needs a Payment Act which will ensure timely resolution of payment issues with larger companies. This, in turn, will improve the cash flow situation of small businesses.

Compliance and Refund of GST

There is a need for further rationalization to benefit the small business sector. This segment needs some flexibility about GST concerning some sectors like manufacturing and incentives for the timely filing of GST returns.

Small businesses are facing problems with getting GST refunds. This leads to a shortage of working capital. If the refunds were available on time, this would help the small businesses perform better and also provide a huge financial relief for them.

Supporting New Entrepreneurs

The MSME Federation has pointed out that scaling up the business is a major challenge for small businesses. The major problem is inadequate capital. Banks and other financial institutions require collateral for loans which these small businesses are unable to provide.

The MSME sector also lacks skilled labour, infrastructure, and capital. Funds should be allocated in the budget for MSMEs so that they can expand their business.

Distressed Asset Fund

If the proposed distressed asset fund that is amounting to Rs. 5000 crores is available, then the liquidity problems faced by small businesses will be minimized. This would also lead to higher growth in GDP.

Private Equity firms and companies can invest in MSMEs if the Fund of Funds worth Rs. 10,000 crores is created. Term sheets and production structures would benefit from innovation through Private Equity firms.

Funding Without Collateral

Small businesses would benefit from the Credit Guarantee Fund Trust for Micro, and Small Enterprises as this would help them get loans without collateral security.

Different GST Returns to Be Filed

If you are a dealer providing goods and services with a turnover exceeding Rs. 40 lacs, then you need to be familiar with gst return filing.

There are 2 returns to be filed monthly and 1 return to be filed annually. The 2 monthly returns are GSTR-1 and GSTR-3B.

There are different GST Returns to be filed according to the category of goods and services provided. Frequencies for submission vary from monthly and quarterly to yearly.

The due dates for GST have been extended due to COVID-19.

If you are a normal GST payer, you need to file your GSTR-9 annually. The due date has been extended to 30th June 2020.

GSTR-1 needs to be filed monthly if your turnover is higher than Rs. 1.5 crores and quarterly if it is less than Rs. 1.5 crores. The due date for filing the quarterly return is 30th June 2020. Inward supplies are recorded in this form.

GSTR 10 is used for cancellation or surrender of GST. The due date falls 3 months after the cancellation order date or cancellation.

You need to know which return applies to you.

What You Need to Know About GST

You can find detailed information about GST in gst wiki. The introduction of GST, along with the different rates of GST applicable to different categories of goods and services are also available. Information regarding the GST network that ensures that all transactions related to GST are complied with. You will also get statistics on GST collections.

Empower Your Business With GST

GST has replaced the multiple indirect taxes that were levied on dealers of goods and services like VAT, service tax, and excise duty. With one nation, one tax doing business has become easier in India.

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