President Pranab Mukherjee and Prime Minister Modi at the Laucnch of GST

GST: A Boon or a Burden for Small Medium Enterprises?

There are many theories and confusions going on GST rollout brought by the BJP-Ruled Central Government. There was a time in the recent past when the BJP opposed it tooth and nail.

The then Gujarat Chief Minister Narendra Modi described, “Retrograde in nature and against the tenets of fiscal federalism”.

From strongly opposing the GST to now boasting its benefits, it has been a complete U-turn by the BJP.

Prime Minister admitted recently that he had doubts about GST, while he was in opposition as Chief Minister of Gujarat.

Prime Minister Modi said about GST "Freedom at midnight from tax terrorism"
“Freedom at midnight from tax terrorism” Prime Minister Modi said about GST.

People find it amusing that Modi sitting in opposition for so many years couldn’t clear his doubts, but after becoming the Prime Minister he imposed GST structure in such short time.

The most affected class by GST will be Small Medium Enterprises.

If you count the business doing population of India, and you consider the small shops too, figure goes up to 50% of India’s population.

Small & Medium Enterprises form majority in India.
Small & Medium Enterprises form majority in India.

So this class which is the backbone of our country and is not dependent on the Government for jobs is being burdened by the GST slabs.

Turnover of even Rs 20 Lakhs will be brought under GST.

If you compare other Asian Nations who went as developing nations to being developed nations the result is quite shocking. The GST exemption limit in Singapore is 4.8 crores and in Malaysia is 75 lakh.

So rather than focusing the GST structure with European norms, Government should have taken a clue from our Asian counterparts.

GST-exemption limit in Singapore is 4.8cr
GST-exemption limit in Singapore is 4.8cr

Our Asian neighbors adopted progressive policies and easy taxation for their SME. They understood the role of SME in overall progress of their nations.

While on the other hand our Government is easing policies for the Corporate and burdening the middle class businessman, who is still to overcome the demonetization deluge.

GST has a high impact on Middle Class India
GST has a high impact on Middle Class India

What is being portrayed as a progressing step of the country is going to be a challenge for majority of the nation’s SME.

Small Medium Enterprises which gives employment to Millions of the country men is being neglected. This will give rise to unemployment, reduction in wages and rise in cost of production.

The BJP led Government should hear their grievances and ease the burden of SME’s for a collective nation’s progress.

 

 

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