Lok Sabha Question No. 3662 (UNSTARRED), answered on 2023-08-10
Subject: GST in MSME Sector
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: Santosh Kumar

## GOVERNMENT OF INDIA MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO. 3662 TO BE ANSWERED ON 10.08.2023

## GST IN MSME SECTOR

## 3662. SHRI SANTOSH KUMAR:

Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:

- (a) the  names of the schemes run by the Government to promote Micro, Small and Medium Enterprises (MSMEs);
- (b) the details of the funds spent during the last five years, year-wise;
- (c) the  steps  taken  by  the  Government  to  tackle  the  big  problem  of  Goods  and  Services  Tax (GST) in MSME sector; and
- (d) the  facilities  provided  by  the  Government  to  MSMEs  for  compliance  of  pollution certificate?

## ANSWER

## MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI BHANU PRATAP SINGH VERMA)

(a): The  Ministry  of  Micro,  Small  and  Medium  Enterprises  (MSME)  implements  various schemes for the promotion and development of Micro, Small and Medium Enterprises across the country  in  the  areas  of  credit  support,  formalization,  technological  assistance,  infrastructure development, skill development and training and market assistance to MSMEs. The schemes/programmes  inter  alia  include  Prime  Minister's  Employment  Generation  Programme (PMEGP),  Credit  Guarantee  Scheme  for  Micro  and  Small  Enterprises  (CGTMSE),  Micro  and Small Enterprises-Cluster Development Programme (MSE-CDP), Entrepreneurship Skill Development  Programme  (ESDP),  Procurement  and  Marketing  Support  Scheme  (PMS)  and National SC/ST Hub (NSSH).

- (b): Details of the funds spent  during the last  five  years  by  the  Ministry  of  MSME  are  given below.

| Financial Year   | Amount (Rs. in crore)   |
|------------------|-------------------------|
| 2018-19          | 6,513.13                |
| 2019-20          | 6,717.53                |
| 2020-21          | 5,647.50                |
| 2021-22          | 15,160.46               |
| 2022-23          | 23,583.90               |

(c): As informed by Central Board of Indirect Taxes & Customs (CBIC) and the Office of the GST  Council,  Government  has  taken  several  initiatives/policy  measures/reforms  to  address  the problems of the Micro, Small & Medium Enterprises Sector. Some of them are given below.

- (i) Special registration provisions for MSME Sector: Small and medium enterprises are not required to obtain GST registration, if their aggregate turnover in a financial year does not exceed:
- a) Rs. 40 lakh (Rs. 20 lakh in the States of Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana, and Uttarakhand) for Intra - State taxable supply of goods.

- b) Rs. 20 lakh (Rs. 10 lakh for States of Manipur, Mizoram, Nagaland and Tripura) for Intra-State or Inter-State taxable supply of Services.
2. (ii) Composition levy scheme in GST for Registered Small and Medium Enterprises, tax has to be  paid  on  Quarterly  based  on  a  declaration  and  have  to  file  only  one  annual  return. Scheme may be opted if:
- a) supplier of goods whose aggregate turnover does not exceed Rs. 1.50 crore, (Rs. 75 Lakh  for  Arunachal  Pradesh,  Manipur,  Meghalaya,  Mizoram,  Nagaland,  Sikkim, Tripura and Uttarakhand) in the preceding financial year.
- b) A supplier of services only (or services and goods together) with annual turnover up to Rs. 50 Lakh.
5. (iii) Special  return  filing  provisions  for  MSME  Sector:  All  eligible  registered  suppliers  of goods or services having annual turnover up to Rs 5 crore in the preceding financial year may opt for filing of quarterly return with monthly payment of tax.
6. (iv) Threshold for mandatory issuance of  e-invoice  has  been reduced to  Rs.  10  crore  from 01.10.2022. Data from e-invoice is auto populated in FORM GSTR-1 & FORM GSTR3B of the registered suppliers of goods or services, thereby easing the process of return filing.
7. (v) Retrospective amendment with effect from 01.07.2017 made in section 50 to provide that interest is required to be paid on the wrongly availed ITC only when the same has been availed as well as utilized. Rate of interest on wrongly availed and utilized ITC reduced to 18% from 24% with retrospective effect from 01.07.2017.
8. (vi) Suspension of GST registration will be automatically revoked without requiring taxpayer to make any application with the tax officer, once all the pending returns are filed on the portal.  Time  limit  for  applying  for  revocation  of  cancelled  GST  registration  extended from 30 to 90 days.
9. (vii) UPI  &  IMPS  to  facilitate  registered  suppliers  of  goods  or  services  and  to  further encourage digital payment.
10. (viii) Exemption from filing annual return in FORM GSTR-9/9A for FY 2022-23 to registered suppliers of goods or services having Annual Aggregate Turnover upto Rs. 2 crore. All registered suppliers of goods or services with annual aggregate turnover upto Rs. 5 crore are not required to file Reconciliation Statement in FORM GSTR 9C along with annual return.
11. (d): As informed by Central Pollution Control Board (CPCB), CPCB categorizes industries, into Red,  Orange,  Green  and  White  Categories  on  the  basis  of  pollution  index.  White  categories  of industries  including  MSMEs  are  considered  as  non-polluting  and  are  exempted  from  consent mechanism.

Ministry of MSME is implementing MSME Sustainable (ZED) Certification Scheme, which helps MSMEs improve the process, quality of the product and reduces the negative impact on the environment.