GST and Income Tax Refunds Could Be Processed in the Next 8 Days – Nitin Gadkari

GST and Income Tax Refund for MSMEs

In a move to ease liquidity crunch faced by MSMEs, Minister Nitin Gadkari requested Finance Minister Nirmala Sitharaman to fastrack GST and Income Tax refunds in 8 days.

The lockdown coming to a close in another week; and businesses are staggering to reopen amidst a lull in operations and working capital.

Nitin Gadkari stated on Friday that he wants MSMEs to receive their GST and Income Tax Refund as soon as possible to meet the sudden cash-flow shortage.

The MSME Ministry’s Plan to Revive Businesses

Last week, the MSME ministry announced the opening of MSME ideas portal to encourage investors and VCs to fund new business ideas. This proposal also seeks to promote job opportunities for anyone who lost theirs during the lockdown.

Restructuring NPAs

The MSME sector has appealed to the Government to avail the one-time restructuring scheme for Non-performing assets by the RBI.

New Definition to MSMEs

Besides asking for a GST and Income Tax refund, the MSME ministry has proposed restructuring the MSME definition.

The current definition is linked to investment in plant and machinery, and the Government wants to change it to a turnover based classification as well. The new definition could help MSMEs procure loans and increased relief measures.

Post-Lockdown Economic Relief Package

The proposed ₹10 trillion package would be a big push to the MSME sector. The package is expected to be released in phases, along with the GST and income tax refunds.

Regulating on Imports to promote local production

Nitin Gadkari also stated that a special focus towards export enhancement is important to revive businesses right now. His ministry has insisted that the Government restrict imports in order to promote the domestic promotion of goods and services.

How to keep cash afloat before receiving the relief package

No pen, no paper 

Even today, most MSMEs use manual methods to record their transactions, ledger and invoices. This proves to be a problem at the time of filing, in case the vendors defect on any payment. Record all purchases, sales and records online – via invoice generator apps or ledgers.

Instamojo recommends:

The Credit-book App on Instamojo allows you to keep a regular track of all business expenses and set reminders to vendors for timely payments.

Set up online stores, run offers

Do not wait to open shutters for your store. Conduct a clearance sale online, do not waste precious cargo. Allowing customers to shop online and buy at a later date will help bring in the cash flow you need to continue operations. Run discount offers, send your customers an email with what’s to come.

Instamojo recommends: 

Set up an online store on Instamojo for free and keep your business afloat easily. No transaction fees till ₹ 10,000 and unlimited access to features that promote organic business growth.

Take care of employees

Pay your workers their wages and salaries. This might result in an initial drain of cash flow, but it helps revive it soon after when productivity increases. Take care of their basic needs, provide water and sanitation facilities for your staff at any cost.

Relaxing filing requirements, waiving penalties and late fees and reducing GST rates are some of the other expectations MSMEs have from the Government.

With an urgent revamp of labour laws, with combined support from banks, Government bodies and the public, the MSME sector should see slow stability in the coming months.


READ ALL ABOUT MSME REFORMS HERE

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