Units get tax relief; Infrastructure boost to create demand for small biz, new jobs to boost demand
The annual Budget for 2018-19 is a mixed bag for small businesses, local businessmen said here on Thursday. The players praised the proposal to raise the annual turnover limit to Rs 250 crore to avail the 25% corporate tax rate, but expressed the need to revise the definition of Micro, Small, Medium Enterprises, as it has not been reviewed for over a decade now.
Speaking to reporters in the city, Shailesh Patwari, President of Gujarat Chamber of Commerce and Industry (GCCI), said the move to raise the annual turnover limit for businesses from the existing Rs 50 crore will benefit the MSMEs the most. "This will reduce the tax burden from 30% to 25%. The lower tax payout will mean that companies have more funds for expansion. They will have more money in hand," said Patwari. "Moreover, the proposal to boost infrastructure will create demand for small businesses. And with the focus on creating jobs, the demand for goods will rise."
However, the players feel that the Budget could have had much more benefits for MSMEs. Jaimin Vasa, Senior Vice-President of GCCI, said the definition of MSMEs had not been revised since 2006 and it was high time that it was reviewed. "In over a decade the costs have risen manifold but the classification of the units have remained unchanged. We had requested the government to revise the definition. Had the revision been made, it would benefit small businesses significantly," said Vasa.
According to the existing definition, micro units are the ones with an investment in plant and machinery of up to Rs 25 lakh, while for the small and medium units, the limits are Rs 5 crore and Rs 10 crore, respectively. The demand is to raise the limits to Rs 50 lakh, Rs 10 crore and Rs 50 crore, respectively.
Patwari added that a drop in interest rates would have helped MSMEs a lot. He said that it was necessary to announce duty drawbacks, as that would make Indian exports hcompetitive in global markets.
MICRO SCAN
- According to the existing definition, micro units are the ones with an investment in plant and machinery of up to Rs 25 lakh, while for the small and medium units, the limits are Rs 5 crore and Rs 10 crore, respectively.
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