Lok Sabha Question No. 1939 (UNSTARRED), answered on 2018-12-21
Subject: Impact of GST and Demonetization on MSME
Ministry: FINANCE
Asked by: RANGASWAMY DHRUVANARAYANA

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

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## LOK SABHA UNSTARRED QUESTION No.1939

## TO BE ANSWERED ON FRIDAY, DECEMBER 21, 2018/AGRAHAYANA 30, 1940 (SAKA)

## Impact of GST and Demonetization on MSME

## 1939. SHRI R. DHRUVA NARAYANA:

Will the Minister of FINANCE be pleased to state:

(a) whether introduction of Goods and Services Tax (GST) immediately after demonetization sounded death knell to Micro, Small and Medium Enterprises (MSMEs) and if so, the details thereof; and (b) whether the Government has taken any measure to check this and if so, the details thereof?

## MINISTER OF STATE FOR FINANCE (SHRI SHIV PRATAP SHUKLA)

- (a) No Madam. GST has been implemented in the country successfully with effect from 01.07.2017. It has benefited all sectors of the economy including the MSMEs.
- (b) Based  on  the  representations  and  feedback  received,  the  GST  Council  has  undertaken  various decisions  from  time  to  time  to  alleviate  the  concerns  raised  by  the  small  and  medium  sectors. Details of various such decisions implemented for the small and medium enterprises are placed below:
- (i) Increase in aggregate annual turnover threshold for eligibility under the composition scheme from Rs. 75 lakh to Rs. one crore for 27 States (including Jammu & Kashmir and Uttarakhand).
- (ii)  Increase  in  the  aggregate  annual  turnover  threshold  for  eligibility  under  the  Composition scheme from Rs. 50 lakh to Rs. 75 lakh for Special Category States (as specified in sub-clause (g) of clause (4) of article 279A of the Constitution) other than Jammu & Kashmir and Uttarakhand.
- (iii) Taxpayers having annual turnover of up to Rs.1.5 crore in the previous year provided with an option  to  file  quarterly  Returns  (FORM  GSTR-1)  and  taxpayers  having  annual  turnover  above Rs.1.5 crore to file monthly returns (FORM GSTR-1).
- (iv) Registered persons making supply of goods to make payment of tax on issuance of invoice and not at the time when advances are received.
- (v)  Suspension  of  the  application  of  reverse  charge  mechanism  under  Section  9(4)  of  the CGST/SGST Acts, 2017 and Section 5(4) of the IGST Act, 2017 till 30th September, 2019 for all categories of registered persons including Composition taxpayers.
- (vi)  Uniform  rate  of  tax  @1%  under  composition  scheme  for  manufacturers  and  traders.  The turnover for traders will be counted only for supply of taxable goods. No change in composition scheme for restaurants sector.
- (vii) Supply of exempted services by Composition taxpayer will be allowed and the same will not be taken into account while computing the aggregate turnover.
- (viii) The amount of late fee payable by a taxpayer whose tax liability for the month was 'Nil' will be Rs.20/- per day (Rs.10/- per day each under CGST & SGST Acts) subject to maximum Rs.5000/- each under Act from October, 2017.
- (ix) The amount of late fee payable by other taxpayers will be Rs. 50/- per day (Rs. 25/- per day each under CGST & SGST Acts) subject to maximum Rs.5000/- each under Act from October, 2017.

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