GST affects businesses- COTMA writes to TN Finance Minister

Coimbatore Tirupur district Micro and Cottage Entrepreneurs Association(COTMA) President Sivakumar has on Wednesday written a letter to the Tamil Nadu Finance Minister Palanivel Thiagarajan.

In the letter, he has urged the Finance Minister to bring the issues in GST that would severely affect the businesses, to the notice of the Centre and the GST Council. According to the letter, “The entrepreneurs involved in job works are levied with 12% GST as per the Central Government’s GST slab on the basis of labour charge.

This should be reduced to 5 per cent. The amount of interest and penalties currently levied on delayed tax-paying entrepreneurs is very high. This should be removed. The seller who sells an item must pay their GST by the 11th of each month. If the returns are not filed, the GST paid by the customer who purchased the item will be deducted.

The provision that the tax cannot be taken as an input tax should be withdrawn.” He said that the GST levied on the raw materials for the manufacturing of certain products is comparatively low as the tax rate is higher when the manufactured goods are sold. The low tax rate is causing a crisis for entrepreneurs.

“Entrepreneurs who do not file or pay the returns will have to pay their full GST amount within 30 days of account deactivation along with 18% interest. If there is a failure of payment, they cannot continue to do their business until they appeal to the tribunal and pay the tax arrears with the full payment of 18% interest along with the penalty amount fixed by the officers without deducting the input tax.

They can update their GST account only upon receiving the judgement for their appeal to continue their business,” the letter stated. “Therefore all these issues concerned with the GST that would affect the businesses should be brought to the notice of the GST Council and the central government”. Thus stated in the letter.

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