Sangh Parivar affiliates demand changes in GST, slam NITI Aayog

Demands were made to ensure MSMEs continue to get excise exemptions

In their continuing strategy to provide opposition from within to the Narendra Modi government’s economic policies, a Sangh Parivar outfit on Friday raised concerns about the impact of the goods and services tax (GST) on micro and small enterprises, while another outfit accused the NITI Aayog of pursuing an agenda set by multinational companies.

Laghu Udyog Bharati, an affiliate of the Rashtriya Swayamsevak Sangh (RSS) which represents micro and small industries, on Friday demanded “modifications” in the Central GST Act to ensure that micro and small enterprises, or MSEs, continue to get excise exemptions.

“We want GST to be modified. We are not satisfied with GST in the present form. The government should come up with amendments to remove its drawbacks,” its national president, Om Prakash Mittal, said.

He said MSEs been availing of excise exemption for the past 30 years, under which the turnover limit was raised to Rs 1.5 crore in 2006-07. "But under the GST regime, the threshold limit is Rs 20 lakh turnover for excise duty exemption, which is grossly unrealistic in the context of inflation," Mittal said.

The outfit suggested that the tax rate under the Central GST Act should be made zero for MSEs up to a turnover of Rs 2 crore so as to compensate for the current exemption of excise duty. It also suggested that refund provisions should be introduced for the CGST amount collected on a quarterly basis or the Composition Scheme for micro and small scale manufacturers should be enhanced to Rs 2 crore of aggregate turnover.

The outfit also has concerns about “the complex structure of filing of returns, the draft rule of E-way bill and accounts and records” that GST will entail and impact the growth of the sector. Laghu Udyog Bharati said the MSE sector should be allowed to file all the details in one return. It also demanded exemption in relation to penal, inspection and survey provisions for the MSEs up to a turnover of Rs 2 crore, at least for the initial three years. 

It also asked the government to pass the small factories Bill. On the recommendations of the one-man committee headed by former cabinet secretary Prabhat Kumar on the MSME (micro, small and medium enterprises) policy framework. Mittal said the incentives extended under the priority sector tag should not be applicable to medium industries if their turnover is up to Rs 2.5 crore. He said medium scale industries should be brought under the commerce and industry ministry or the heavy industry ministry.

Continuing with its running battle with the NITI Aayog, the Swadeshi Jagran Manch, an economic think tank affiliated to the RSS, said the Aayog has repeatedly given policy advice that is contrary to the agenda of the Modi government.

“We want to know whether the finance minister has any plans to suggest that NITI Aayog be scrapped since its views on key issues are inconsistent with the that of the government,” its co-convener Ashwani Mahajan said.

He said the latest instances were the Aayog’s suggestion to tax agricultural income, close down the National Pharmaceutical Pricing Authority and support for genetically modified, or GM, seeds.