Quick Summary
India's small businesses have issued a direct and detailed call for a simplerGSTregime, urging authorities to move aggressively towards 'GST 2.0' focused on ease of compliance. During the India SME Forum's (ISF) GST Samvaad 2.0 stakeholder consultation, over 60 MSME entrepreneurs engaged directly with senior GST officials, flagging critical operational hurdles that continue to inflate costs and drain entrepreneurial energy. Officials, in turn, acknowledged the concerns and committed to targeted
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FAQ :
MSMEs are concerned about automatic Input Tax Credit (ITC) blockages due to technical mismatches, excessive documentation and delays in registration approvals, inconsistencies in the Goods Transport Agency (GTA) tax framework, and pressure on working capital from ITC accumulation.
Entrepreneurs pointed out excessive documentation requirements and significant delays in obtaining registration approvals. Complications for MSMEs operating from shared premises were also noted.
Participants flagged inconsistencies in the implementation of the GTA tax framework, particularly across different e-commerce platforms, which they believe creates an uneven playing field.
GST officials acknowledged the issues, provided clarifications on complex areas like ITC eligibility and Reverse Charge Mechanism (RCM) for GTA services, and confirmed that a review of delays in refunds, cancellations, and registrations is underway.
The demand is for a simpler GST regime, referred to as 'GST 2.0', which would involve intuitive digital systems, clearer guidance, and a consistent approach across jurisdictions to reduce compliance costs and unlock entrepreneurial energy.
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