Finance Minister, Nirmala Sitharaman has announced that the pending refunds of the micro, small and medium enterprises must be cleared in the next 30 days and no further dues should be pending for more than 60 days. As Sitharaman focuses on making the entire GST refund process easier for the businesses, the Central Board of Indirect Taxes and Customs (CBIC) has already started to finalise the ways to speed up the refund of INR 4,000- 5,000 cr to the MSMEs.
“MSMEs do not have to be worried about money being stuck. If there are large companies on TReDS (trade receivable financing of MSMEs) platform who owe money to MSMEs then those companies can now use GSTN for all bill discounting made on TReDS,” said Sitharaman.
The minister is set to meet with the officials of CBIC and GST Network to work out a refund mechanism. Many of the small businesses have had an impact on their liquidity because of the cash crunch prevailing in the non-banking finance companies (NBFCs).
The Centre’s aim to provide sufficient liquidity to these businesses through the refund of GST and arrears’ payment by the government departments and central public sector companies as a major part of MSMEs funding come from these companies.
"The coming of refund in such a short span will improve the liquidity of the sector as working capital always becomes an issue for the small and medium enterprise,” informed Arun Kumar, the secretary of MSME.
Furthermore, the Income Tax department withdrew the enhanced surcharge on capital gains for foreign portfolio investors, both in equity and derivative segments. An official clarified the department’s stand on capital gains from derivatives, stating that they are not a capital asset and all the income arising from their transfer comes under business income and that income is liable for normal tax rate.
The move is aimed at easing the GST related woes and will also reduce the capital burden in the MSMEs sector.