The up coming Lok Sabha election has raised new hopes in corporate and business sectors. The new government going to be formed in mid 2014 will come with a new basket of offers in all sectors including small and medium entrepreneurs (MSEs).
Most of SMEs with dreams
in their eyes, expect the Goods and Service Tax (GST), the proposed
tax reform that seeks to replace all the indirect taxes like central
sales tax, state-level sales tax, excise duty, service tax and
value-added tax (VAT) with a single and uniform tax rate across the
country, will come to reality. Their efforts to implement GST has
missed several deadlines till now.
According to a SME Times
report while unfolding SMEs' problems, MD of Impex Appliances Ltd.,
Dinesh Garg said, "We are expecting that there should be a
common tax system, which is batter for us. Because right now we have
different taxes and if a common tax system will be there it will
definitely help us more.”
The present tax system
promotes different pricing in states and competition in the domestic
market. The proposed tax system will help and prompt a smooth
business across the country and we are expecting this from the new
government, Garg added.
When a manufacturer is
sourcing his raw materials from one state and his clients too mostly
are in the same state the present tax system is right. But, when
he/she collects raw materials from one state to other, he/she has to
pay 2 percent central sales tax (CST) on it and when he transports
the finished product back into his state, he has to pay another 2
percent CST on it.
But the GST is a tax
reform that seeks to create a common market for all goods and services
across India. It has long been delayed only because the difference
between states and center tax compensation design.