The Finance Ministry has proposed ease of compliance as a part of Good and Services Tax (GST) reforms to ensure smooth functioning and seamless business environment for businesses, primarily for small and medium enterprises and start-ups. By enhancing the process of three Rs - registration, return and refund, the center aims to ease the burden of SMEs.
For small businesses, the registration process has been fast-tracked, and it will be done within three days of application, informed a source from the ministry. Similarly, for the return filing, the manual intervention has been minimised to ensure they don't have to deal with compliance burden arising due to multiple notices and any sort of mismatch between input tax and tax summary can be curtailed.
Refund process for the businesses -- either exporters or those who have inverted duty structure (IDS) -- will also be fast tracked. There will be minimal intervention of tax official and guaranteed automated returns for exporters to simplify the process.
"Substantial part of the refund will be done at the earliest possible time after the application is made, and it will surely be much lesser than the current time needed," the center informed. The government is aiming to eventually eliminate the inverted duty structure and is identifying sections which have very high IDS.
The government informed the media on Friday that the restructuring aims to boost liquidity among medium and small enterprises alongside ensuring there is adequate value addition to these sectors.
The government is confident that the restructuring will help boost the business of the SMEs, thereby helping them gain investors' confidence in the long run. "We have come up with a comprehensive proposal. The GST council will handle it sector wise and items wise," said the source.
The GST Council meeting will be taking place in September or October as per the source.
Earlier, Prime Minister Narendra Modi has said that the government’s reforms aim to reduce compliance costs for startups, MSMEs, and entrepreneurs, while ensuring freedom from the fear of outdated legal provisions. “This creates a more conducive environment for business growth, encouraging innovation and economic self-reliance,” he said in his Independence Day speech.