: Opinion: Amend 4 ruinous GST provisions #IndiaNEWS #News By T Muralidharan The following four key provisions under the GST regime spell disaster for the MSME sector: • Taxpayer must pay the entire

Opinion: Amend 4 ruinous GST provisions #IndiaNEWS #News
By T Muralidharan
The following four key provisions under the GST regime spell disaster for the MSME sector:
• Taxpayer must pay the entire GST dues before filing the GST Summary Return (GSTR 3B)
• GSTR 3B cannot be filed until and unless the delayed payment interest at 18% is also paid
• Taxpayer is blocked from filing the outward supplies report (GSTR -1) if he fails to furnish GSTR 3B in the previous month
• Is denied Input Tax Credit (ITC) if the supplier of the MSME does not remit the amount to the government, after receiving the GST payment from the MSME
These are one-sided and draconian for the MSME sector. Let me explain why.
MSMEs are suppliers to many large corporates, who are now insisting that the MSMEs file their GSTR-1 on time so that they can claim the input credit. Till recently, GSTR-1 was filed by most MSMEs on time because it was not linked to any payment or to filing of any other type of report. But a new circular changed this by insisting that the previous month’s GSTR 3B must be filed first. Many MSMEs who cannot file GSTR 3B will be blacklisted or penalised by the large companies, in addition to being penalised by the GST department in the form of huge interest and penalties. This will kill MSMEs. This brings us to the moot question.
Why are MSMEs unable to remit GST dues on time?
This is the unfairness of the issue. The GST is a levy charged by the government and the MSME taxpayer is supposed to collect this levy, deduct the Input Tax Credit and pay the dues to the government by the 20th of the next month. Here, the taxpayer plays the role of the agent of the government.
But unfortunately, the government wants the MSME to pay the dues irrespective of its GST collections. This is impossible because MSMEs do not have the bargaining power to dictate the payment terms to their customers, who pay only after 60 to 90 days.
The tragedy is that even if one big customer does not pay the GST on time, the MSME will have to default because the GSTR 3B can be filed only after 100% dues are paid. A bigger tragedy is that, even if the taxpayer pays part of the dues, the government will use that part money but will not reduce the interest for the part payment. The biggest tragedy is that the MSME must pay the draconian 18% interest along with GST dues, every month.
One-sided Issues
If you ask the GST department as to why it is insisting that MSMEs pay and then only file the GSTR 3B, the reply is: This will help us settle the IGST dues to the State governments, on time. Look at the irony. The Centre does not want to finance its GST dues to the States but wants the tiny MSMEs to finance the GST dues to the Central government.