Laghu Udyog Bharati is one of India’s largest MSE Industry Networks in India, with branches in every state and members in every district of India, working towards the welfare of MSEs in India. We have grass-root level insights into the challenges faced by the MSEs as well as changing industry trends & practices on the ground.
3. 3
UDYOG TIMES
Start-up
Ecosystem
Editorial
Áflfl⁄UÁáÊ∑§Ê
Editorial 03-03
ECLGS Credit Guarantee Scheme.... 04-05
Pre-Budget Memorandum by LUB..... 06-09
IMPORTANT GST UPDATES ..... 10-10
India to be World's Fastest Growing.... 11-11
xv ◊Êø¸ Ã∑§ „⁄U „Ê‹ ◊¥ ∑§⁄U ‹¥ ÿ ¡M§⁄UË ∑§Ê◊.... 12-12
News Update ..... 13-13
LUB's News in Brief.... 14-16
Price - 10/- Life Membership 1000/-
An In-House Monthly Magazine of Laghu Udyog Bharati
published by Om Prakash Mittal
Mail: opmittal10256@gmail.com Web : www.lubindia.com
Corporate Office & Head Office :
Plot No. 48, Deendayal Upadhyay Marg,
New Delhi-110002
Ph.: 011-23238582
Registered Office :
Plot No. 184, Shivaji Nagar, Nagpur-440011
Ph.: 0712-2533552
Dr. Kirti Kumar Jain
kkjain383@gmail.com
T he 3rd Meeting of National Start-up Advisory
Council, held in last week of December-2021,
discussed some important issues regarding the entre-
preneurship ecosystem of the country. This council
was constituted by DPIIT to advise the Government
on measures needed to nurture innovation and start-
ups to push sustainable economic growth and gener-
ate employment opportunities, and the last week
meeting shed light on some key issues.
Among the interventions discussed include
National Capacity Building Program for Incubators,
pushing manufacturing start-ups, empowering the larg-
er pool of Family Offices and HNIs to invest in start-
ups, accelerating deep-tech start-ups, establishing an
international platform to help start-ups go global,
encouraging women entrepreneurship, and a holistic
program aiming at enabling global mentorship, market
access, international opportunities and B2B connects.
It is notable here that 45% start-ups in India are
from Tier 2 and 3 cities and 623 districts have at least
1 recognized start-up. It is equally interesting that
Indian start-ups have turned COVID-19 crises into an
opportunity and made 2021 the year of Unicorns with
79 Unicorns now thriving. These figures reflect that
our start-up ecosystem is gaining strength with every
passing day, and a comprehensive government strate-
gy at this crucial juncture can act as a catalyst.
Meanwhile, according to latest figures, 68%
Mudra Yojana accounts are held by women entrepre-
neurs, availing 44% of sanctioned amount. These fig-
ures reflect the fact that an increasing number of
women are now embracing entrepreneurship as a
viable employment opportunity. During the Covid-
period also Women Self Help Groups from Northeast
have led from the front in providing bulk supply of
face-masks in different innovative designs and colors.
I invite your opinion ….
c c c
OFFICIAL PUBLICATION OF LAGHU UDYOG BHARATI
Volume -5 Issue - 02 December, 2021
Editorial Board
g Patron
Shri (Dr.) Krishna Gopal ji, Sampark Adhikari
Shri Prakash Chandra, National Org. Secretary 094685-78166
Shri Baldevbhai Prajapati National President 098241-55666
Shri Ghanshyam Ojha, National Gen. Secretary 098290-22896
g Publisher
Om Prakash Mittal, Past President 094140-51265
g Editor
Dr. Kirti Kumar Jain 094141-90383
g Associate Editor
Mahendra Kumar Khurana 098290-68865
g Co-Editor
Dr. Sanjay Mishra 086198-60354
UDYOG
TIMES
4. A
SBI research reports estimates almost 13.5 lakh
MSMEs accounts were saved due to ECLG
scheme (including restructured) with almost
93.7% of such accounts are in Micro and Small category.
In absolute terms, MSME loan accounts worth Rs. 1.8
lakh crore were saved from slipping into NPA during the
period. This is equivalent to 14% of the outstanding
MSME credit being saved from becoming NPA. SBI
Research also estimated that 1.5 crore workers were
saved from potential unemployment due to the credit
guarantee scheme.
The Emergency Credit Line Guarantee Scheme
(ECLGS) was unveiled as part of the Rs. 20 lakh crore
comprehensive package announced by Finance Ministry
in May 2020, to aid Micro, Small and Medium
Enterprises (MSMEs) sector in view of the economic dis-
tress inflicted by the COVID-19 pandemic.
Under ECLG scheme, 100% guarantee was provided
for 20% extra credit to MSMEs and Business Enterprises
with outstanding up to Rs.50 crore. In August 2020, the
scheme was extended to Mudra borrowers and
Individual loans for business purposes. In November 20,
the scheme was extended through ECLGS 2.0 for 26
sectors identified by the Kamath Committee and for
Health Care sector up to March 21, for entities with out-
standing credit of above Rs.50 crore and not exceeding
Rs.500 crore.
4
UDYOG TIMES
Indepth Report
Udyog Times Desk
ECLGS Credit Guarantee Scheme Saved
13.5 Lakh MSME Units & 1.5 Cr Jobs,
14% of MSME Loans Turning NPA
(In May 2020, the Modi Government launched the Emergency Credit Line
Guarantee Scheme (ECLGS) for Micro, Small and Medium Enterprises (MSMEs)
to provide relief to the sector amidst the COVID-19 pandemic disruption.)
5. 5
UDYOG TIMES
Since then, the Modi Government has extended the
scheme to cover various industries (till now four extend-
ed versions of ECLG scheme have come out).
Of the extended limit of Rs 4.5 lakh crore, 64.4% or
Rs. 2.9 lakh crore has already been sanctioned by 21
November, 21.
According to estimates by the SBI Research, ECLG
scheme is likely to have saved almost 13.5 lakh MSMEs
accounts worth Rs. 1.8 lakh crore from slipping into NPA
during the period. This is equivalent to 14% of the out-
standing MSME credit being saved from becoming NPA.
Out of the 13.5 lakh MSMEs accounts that were saved
due to ECLG scheme, almost 93.7% are in micro and
small units.
SBI research also calculates that if these micro, small
and Medium Enterprises units had turned nonperforming
in case of no credit guarantee support, about 1.5 crore
workers would have become unemployed. In effect, the
ECLG scheme saved the livelihood for 6.0 crore families
(assuming four family members per worker including
herself), the report says
Trading Sector (including small kirana shops) has
benefitted the most followed by Food Processing, Textiles
and Commercial Real Estate, the report adds. Top ten sec-
tors accounted for ~75% of the outstanding amount saved
for becoming NPAs
Amongst the States, Gujarat has been the biggest ben-
eficiary, followed by Maharashtra, Tamil Nadu and Uttar
Pradesh. Top ten states accounted for ~75% of the out-
standing amount that did not slip into NPAs.
SBI Research team analysed the Special Mention
Account (SMA) data for the banking system based on
trends in SBI portfolio to quantify the benefits derived
from ECLGS in terms of asset quality.
SMA is an account exhibiting signs of incipient stress
resulting in the borrower defaulting in timely servicing of
their debt obligations, though the account has not yet been
classified as NPA as per the extant RBI guidelines. Early
recognition of such accounts enables banks to initiate
timely remedial actions to prevent their potential slip-
pages into NPAs.
In 2020, MSMEs received higher credit than com-
pared to 2019 primarily due to ECLG scheme, the report
says. Incremental credit in 2020 (over 2019) was much
higher than the credit provided in pre-pandemic times
(2019 over 2018).
In FY 2021, the country disbursed loans worth Rs. 9.5
lakh crore to MSME sector, which is significantly higher
than preceding years of Rs. 6.8 lakh crore in FY 2020.
The report said that this sharp jump in MSME lending in
2021 has been supported by Atmanirbhar Bharat scheme
of ECLGS which provided 100% credit guarantee to
lenders.
The report recommends that the existing Credit
Guarantee Scheme for Subordinate Debt (CGTMSE)
scheme for extending loans to SME sector be relooked
into totality and be reoriented by adopting the best prac-
tices from the current ECLG scheme.
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6. 6
UDYOG TIMES
A
t the outset, we thank to Finance Minister for
having implemented the suggestions given by
Laghu Udyog Bharati-TN on the ECLGS
Schemes and we are extremely delighted with the speed
of action taken on our representation and we hope with
your guidance and support, LUB will work with much
more vigour and enthusiasm to address the perils of espe-
cially the Micro Industries and ensure their development.
The above release of 10% additional working capital has
been welcomed by many organisations and have thanked
the Finance Minister for once again giving the lifeline for
the MSMEs after the 2nd COVID wave.
While LUB appreciates the efforts by the Finance
Minister in reviving the MSMEs, there are a number of
impediments which hamper the growth of MSMEs, due to
issues such as Raw Material Price Rise, reduced working
capital limits by bankers (based on last year's turnover),
Increased fuel & logistics prices and increase in the con-
sumable prices & shortage of skilled labour, after
Pandemic. All these have eroded the already wafer thin
margins and have pushed the Micro Manufacturing units
to the brim. Recent amendments in MSME classification
has brought even erstwhile large industries into MSME
categories and more so the traders have been brought into
the fold of MSMEs. In today's scenario more than 90% of
the unit holders have become Micro Units and hence the
priority sector lending & public procurement schemes are
being cornered by the Major units among MSMEs, leav-
ing very little scope for Micro Manufacturing Units for
their development.
We give below our suggestions to be included in the
Financial Budget for 2022-23.
1. Inclusive Growth- Rural Industrial
Development: We hope it would be agreed that no devel-
opment can be inclusive leaving rural areas of the
Country. The pandemic has given a lesson to us that most
affected areas were the Metros or the Industrialized
Cities. Hence there is an urgent need to Setup/Shift Large
Manufacturing Units to Rural Villages by giving suitable
Incentives/benefits such as Income Tax Holiday, GST
benefits & Power subsidy, access to Non-agricultural
land. To achieve this, we suggest 50 Acres) of every rev-
enue village be reserved for such Large Industrial Units.
This would ensure their ancillaries to also shift to neigh-
bouring rural villages ensuring job opportunities to rural
youth, without abandoning agriculture. This would ensure
employment without displacement and avoid migration to
Cities and ensure Reverse migration.
2. Micro Manufacturing Units (MMUs): i.To intro-
duce a credit mechanism on the lines of Kissan Card for
MMUs to meet their statutory obligations. This facility
shall not be used for meeting other working capital needs
Pre-Budget Memorandum by LUB
LUB’s Tamil Nadu Team giving Pre Budget Memorandum to Finance Minister Smt. Nirmala Sitharaman.
(Suggestions given to Finance Minister for Development of
MSMEs & Inclusion in Budget 2022-23)
Aspirations
Tamil Nadu Team
7. 7
UDYOG TIMES
and shall address only statutory dues. 90 days Interest
Free Credit shall be given for repaying this amount. This
would ensure prompt payment statutory dues, which
would ensure timely receipts to the Government. This
would also ensure the MSME Credit Rating and help the
MMUs in their growth & further development.
ii. Alternately, we suggest GST of 5% for all B2B
transactions - which is a revenue neutral solution, as both
Input & Output will be charged at 5% and there would be
no issue of refund claim. Prevailing GST rates can be
maintained for B2C transactions, thus ensuring no rev-
enue loss to the Government.
iii.VATVs GST Regime for MMUs (Under Rs. 1.50
Crores Turnover - Not covered under Central Excise
Earlier). MMUs are forced to pay GST even on their con-
version cost which they were not paying earlier. A small
comparison has been made for better understanding, for a
typical MMU.
Most of the MMUs supply to Industries, who are not
covered under TReDs. Hence they receive payments only
after 90-120 days. This puts huge financial burden on the
MMUs, even to pay statutory dues such as GST, ESI, PF
& Electricity Charges. To alleviate this problem, we sug-
gest % increase In liability Rs. 20 (Excise Input NA)
Rs.17.5* (Rs.20*12.5%) VAT Vs GST REGIME* after
adjusting input credit available .VAT component is same
for both cases. For calculation, we have taken a commod-
ity which was under 12.5% Excise & 5% VAT / 18% GST-
NAGST regimeRs. 80Rs. 97.5Rs. 17.5251%VAT Vs GST
Raw Material cost Conversion cost & Profit Total Cost
Tax liability VAT regime Rs. 80 Rs. 100 Rs. 5.
From the above, it would be clear that MMUs (who are
under Rs. 1.50 Crore Turnovers) are being burdened with
almost 251% increase in statutory obligation, which has
seriously affected their cash flow. Hence we suggest
issuance of MSME Credit cards to MMU'S to repay statu-
tory dues only (like GST, ESI & PF etc) as an interest free
loan for 90 days. Limit can be fixed at 20% of turnover.
Such facility would relieve the MMUs from their huge
financial stress and make them focus on their business.
3. Sec.115BAB - Concessional rate of tax @ 15% for
new Corporate: The introduction of the above beneficial
section is most welcome one to encourage new industries.
But it is restricted to Limited Companies presently. As the
Government vision is to encourage MSMEs which is the
backbone of the economy, this benefit can be extended to
all the constitutions like Proprietorship, Partnership Firms
and LLPs. Since majority of MSMEs are operating in only
in these constitutions and Corporate structure is meagre.
Further the rules and regulations while availing this
concession under Income-tax Act are very stringent and
well-founded. Therefore, it need not be worried that the
provisions would be misused.
Precedent: There were many concessional provisions
which never discriminated between the assessees' consti-
tution. For eg. erstwhile Sec.80IA was providing 100% tax
holiday for ten years, one of the biggest concessions, if the
industrial undertaking is carrying on any specified busi-
ness like Power, Telecom, housing, etc. There was no con-
dition that those units should only be Corporates/Limited
Companies but the concession was available for
Individuals, Firms etc.
4. GST on Job Work on Engineering Goods:
i. GST on Job Work shall be immediately brought
down to 5% and the Input Tax Credit for Capital Goods
shall be distributed over 3 years. By this there would not
be any situation of any refund, whatsoever.
ii. The above would go a long way in addressing the
severe stress undergone by the Micro Manufacturing Units
and request the Hon'ble Finance Minister for sincere con-
sideration.
Laghu Udyog Bharati has been consistently escalating
the pain undergone especially by the Micro Manufacturing
Units - where in, prior to GST they did not have any inci-
dence of taxation - but now they are burdened with 12%,
which is too high. Although there is a provision of Input
Tax Credit, the Input Tax for such companies is very mea-
gre. We have also consulted many Auditors / Consultants
in this regard and the apprehension of the Government of
Refund may not arise, subject to following conditions.
Hence we strongly advocate for the following points:
5. One Nation One Tax:
i. Government shall work out an internal procedure of
sharing the GST amongst its stake holders and Tax Payers
should be charged only ONE GST. This Laghu Udyog
Bharati sincerely appreciates the concept of One Nation
One Tax. However the same is not experienced in practi-
cality. We have 3 modes of GST: IGST, CGST & SGST.
This has to be done away with and following are our sug-
gestions:
"would go a long way in simplification of the Tax
structure and the complications thereof.
"Alternatively, Tax Payers should be allowed Inter-
Usage of Credit.
6. R&D Expenditure for Proprietor/ Partnership
Firms: R&D expenditure is very critical for the growth of
MSMEs and with most of the MSMEs categorized as
Proprietor / Partnership Firms - they are unable to claim
this R&D expenses as expenditures. This may be given
serious consideration, which would help growth of
MSMEs across the different sectors.
7. Rationalization of GST slabs - Based on
Essential, non-essential and intermediary - Under ease
of doing business: This is a long-term vision which was
missed out while introducing GST. A simple categoriza-
tion of products based on their essentialness would avoid
8. 8
UDYOG TIMES
any litigation on applicability of slab rates and easy to
administer. This can be kept in mind for future rationali-
zation of GST.
8. Automotive Sector:
a. 2WHs and small cars should no longer considered
as luxury vehicles, especially post COVID, we request
suitable amendments in the GST rates for such vehicles
from current 28% to 18%, which would offset the recent
reduction in the volumes across this sector.
b. A separate incentive through PLI scheme may be
proposed by the Government for such of those MSMEs
engaged in Auto Component sector, who are transforming
or upgrading their business to Electric Vehicle Parts.
Automotive Sector has been witnessing a turmoil ever
since transformation of BSIV to BSVI and many MSMEs
have lost out on business due to technological gaps.
Added to the above, the transformation to Electric
Vehicles (EVs) and Semi-conductor Chip Shortages,
Upfront Insurances have also brought down the sales to
Pre-2012 levels, down by almost 30-50%. This is also a
serious revenue loss to the Government GST Collections.
We therefore request to consider SOPs in this Financial
Budget to encourage this struggling Industry. Following
are our suggestions:
9. Fund Allocation for MSMEs: We are thankful for
continuously increasing the allocation of funds for this
sector every year. However, we request the funds to be
allocated separately within MSMEs - as per the catego-
rization of their population. Currently population struc-
ture of Units registered are Micro - 93%, Small - 5% and
Medium - 2%. When funds are allocated for the entire
sector, most of the funds are taken up by the Small and
Medium leaving little scope for the Micro Units.This may
be given serious consideration in this budget.
10. IBC (Insolvency & Bankruptcy Code):
Currently the IBC is present only for the Corporate Sector
and there are only very few of MSMEs in the Corporate
Sector. Hence IBC should also cover the Partnership
Firms and Proprietor Concerns, so that the MSMEs
should also enjoy the exit, from business.
11. LTCG (Long Term Capital Gains) for MSMEs:
Most of the MSMEs dispose off their Assets only to cover
their pending liabilities and are left with very little funds
for their retirement. In view of the above, we request to
consider waiving off of the LTCG in such cases, where in
the proceeds of such distress sale are paid in closing off
their current liabilities. This would go a long way in cre-
ating a peaceful exit in their business and leave some
funds for their retirement.
12. TReDS Scheme: Many Corporates including
PSUs are unwilling to get into TReDS Scheme and
MSMEs are losing the very purpose of this good scheme.
Hence it should be mandatory for all companies with a
Turnover of above Rs. 250 Crores to come into TReDS
Platform and there be a clear mechanism for the same.
Also existing companies who are in TReDS scheme are
seeking reduction in product prices with MSMEs and this
should be avoided.
13. Ban of Cotton Trading By MNCs in India: The
cotton prices have now increased abnormally and in our
country, due to WTO compliance, we allowed MNCs to
trade on our products and thereby, after assessing our cot-
ton strength, a few MNCs started playing a hatched game
against the interest of our textile industry by way of
hoarding a huge stock during the cotton-yielding season
by using their very low cost of international fund.
Further, MNCs make use of Cotton Corporation of
India (CCI) procured cotton stock also in their favour by
booking in advance with CCI on a huge volume basis by
making CCI establishment itself knowingly or unknow-
ingly to sail with their hatched Game plan of creating an
artificial demand in the market and make available a stag-
gered supply of cotton to the consuming textile mills. By
this, they perpetuate their huge earnings at the cost of the
textile industry and as well as cotton farmers. The bone of
contention is that the MNCs are only gaining the real ben-
efit, instead of textile Industry or farmers.
DEMANDS:
a. CCI need to be directed to protect the interest of
farmers at the first instance and should equally act as a
facilitator or catalyst to accelerate the growth of value
chain of textile industry. Being a popular nation, India
needs more jobs to accommodate their citizens and to
ensure the livelihood of household. Which could be pos-
sible only by promoting the value chain of textile indus-
try.
b. CCI need to open its Supply Chain Centre based on
the demand request to facilitate the speedy availability of
cotton at the user end.
c. Textile Mills are consisting of Small, Medium and
Large enterprises and the CCI need to be mandated to
supply cotton directly to the above segments relating to
their capacities instead of fixing a higher benchmark to
the quantities, which only benefit to either Corporate or
MNCs in cotton trade.
Removal of Import Duty on Cotton:
This will bring down the Cotton price drastically to
help industries. And it need not be permanent but on sea-
sonal basis whenever Indian Cotton prices become unaf-
fordable.
14. Incentives to Industrial units under PM Mega
Integrated Textile Region and Apparel (PM-MITRA):
a. GST Deferral or Waiver Scheme:
i. Under Deferral Scheme- Units would collect GST
and can pay after ten years without any interest;
ii. Under Waiver Scheme: GST collected for 5 years
9. 9
UDYOG TIMES
need not be paid;
b. Power Subsidy:
A tariff concession like Rs.2/- per unit of power con-
sumption can be considered;
From the past experience, it can be seen that there is
reluctance amongst the industrial units to relocate in any
new industrial parks due the many reasons. and it can also
be seen that many existing industrial parks continue to
function without its full occupancy and vacancy would be
around 50%. Therefore, following incentives can be con-
sidered for the industrial units establishing their new units
in Industrial parks:
Precedent: Tamil Nadu Government had the above
schemes in 1980-1990 under their Industrial policy;
Precedent: Gujarat Government had this scheme in 2014
in its Industrial
c. Tax Holiday under Income-tax Act: 100% Tax
deduction for ten years under Sec.80IA or partial deduc-
tion like 40-50% on the Income can be considered;
Precedent: There were deductions u/s. 80HH and 80I
under which deduction at 20% / 25% on Income was
available for New industries;
U/s.80IA, 100% Tax Holiday was available for Power
companies, Hotel, Hospitals, Shipping, Telecom, etc. till
2017.
Support for Existing Clusters:
There are many existing textile clusters all over India.
For example, Tamil Nadu has Textile Clusters in every
100 km. across the State as mentioned below:
There are few pending issues which are peculiar to
each cluster. If those issues are solved, the growth in those
clusters would be phenomenon. Importantly, few issues
would be simply policy interventions which do not
involve any financial outlay. A steering committee could
be formed to address these issues by taking a survey from
each such cluster. And LUB can take up the work of vis-
iting those clusters and getting the list of grievances.
Out of Rs.4445/- Crores of outlay for MITRA, a small
portion can be allotted to address the issues of the exist-
ing clusters which would do wonders in the business
growth in those areas.
15. To resume Tax Holiday benefits under Income-
tax Act u/s. 80IA for Renewable Energy undertakings
- For Achieving 500 GW Target even before 2030: It is
an undisputable fact that the earlier spurt in Renewable
energy production by industries were due to attractive tax
holiday for 10 years u/s.80IA of the Income-tax Act till
2017.
If it is reintroduced, the mission of achieving 500 GW
need not be waited till 2030 but would fructify in 5 years'
time from now.
16. Requisition to Constitute Knitwear Board:
Knitwear Apparel Manufacture is a rapidly growing sec-
tor with a potential to generate millions of jobs in the near
future. But, there is no specialized or focused agency at
the government level to look after and handhold the
industry in its pursuit of rapid growth. We wish to note
that Tirupur Knitwear is contributing 60% of Country's
knitwear production and still have a lot of potential to
grow significantly and has now become an epitome cen-
tre of MSMEs.
The table below shows the existence of various sepa-
rate boards for different products. The export turnover of
those products are meagre as compared to export of
Knitwear garments. But the Knitwear is not bestowed
with a separate body.
Purpose: In order to effectively carry out various ini-
tiatives and projects required in this regard, it is impera-
tive to establish a 'Knitwear Board' and to function from
Tirupur, which can act as a catalyst for growth of this
industrial segment and also across the nation. Knitwear
board shall be mandated to accomplish the following
objectives.
1.Providing a research wing facilitator which would help
for product diversification and facilitate Micro and Small
units to make use of it as commercially viable factor.
LUBs War Footing Efforts could Win -
GST rate for textiles may not increase from 5% to
12% from 1st January
Union Ministry of Textiles, after receiving inputs from
industry associations, has now decided to approach the
GST secretariat seeking restoration of the rate of Goods
and Services Tax (GST) to 5 percent, CNBC-TV18
reported.
"The industry is of the view that textile fabric manu-
facturers or fabric weavers will see a significant rise in
their working capital requirements due to the disparity, as
raw material will be taxed at 5 percent and the finished
product will be taxed at 12 percent. So, they are seeking a
restoration of the old rate of percent," the source was
quoted as saying by the report.
Officials told that, "The textiles ministry is opposed to
the rate hike and feels that the industry needs relief. Any
decision which adds to their troubles needs to be flagged.
So, our communication to the GST secretariat is very
clear maintaining status quo on rates and make any
change only after a detailed discussion with the ministry
and the industry stakeholders".
The industry has been clamouring for a reversal as it
feels the move will make its products costlier, which will
impact the sale.
Earlier this month, Raymond Group CFO Amit
Agarwal told ETCFO that GST rate hike will deter
demand, and that the company has plans to pass on the
full increase.
c c c
10. 1. No ITC Unless Reflected in GSTR 2a/2b:
Input Tax Credit shall not be available unless details
of invoices uploaded by supplier in Form GSTR-1 are
communicated to the recipient (i.e reflected in GSTR
2A/2B). Margin of 5% will no more be available.
2. Difference B/W GSTR-1 & 3b: Direct Recovery:
Section 75(12) is amended to provide that tax declared
under GSTR-1 but not included in GSTR-3B, will be
considered as "Self Assessed Tax" and hence, direct
recovery of such tax under Section 79 will be possible
even without issuing any Show Cause Notice.
3. E-Way Bill: 200% Penalty to Release Goods:
At present, full tax and 100% penalty is required to be
paid to release the goods which are seized for viola-
tion of E-way Bill related provisions and for non-car-
rying of other documents under Section 129. Now, it
is provided that goods will be released on payment of
penalty equal to 200% of tax and tax will be recovered
through separate proceedings.
4. Provisional Attachment of Assets of Bogus Billing
Beneficiaries:
Not only supplier and recipients but assets of the ben-
eficiaries of bogus billing can also be provisionally
attached.
5. Scope of Provisional Attachment Widened:
Provisional attachment is made applicable in all cases
of proceedings of Assessment, Inspection, Search,
Seizure and Arrest or Demands and recovery. Now,
provisional attachment of property, like bank
accounts, can be done not only in the case of Show
Cause Notices and investigation but also for other pro-
ceedings like Scrutiny of Returns and tax collected but
not paid.
6. 25% Pre-Deposit for E-Way Bill Appeals:
For filing appeals, before first appellate authority
against order for violation of E-way bill and other pro-
visions, it will be mandatory to pay pre-deposit of
amount equal to 25% of penalty imposed.
7. E-Way Bill Co-Noticee May Not Get Free by
Payment of 200% Penalty by Main Noticee:
Where proceedings against main person liable to pay
tax have been concluded under Section 74, proceed-
ings against co-noticee are also deemed to be con-
cluded as provided under Explanation 1(ii) to Section
74. However, now, such benefit will not be available
to co-noticee for proceedings initiated to impose
penalties for violation of E-way bill.
GST Taxpayers: Govt? Reduces Compliance Burden:
Taxpayers with Annual Aggregate Turnover (AATO)
up to 5 crore are not required to file the reconciliation
statement in Form GSTR-9C for FY 2020-21 onwards.
Taxpayers with AATO above 5 crore can now self-cer-
tify the reconciliation statement instead of getting it certi-
fied by chartered/cost accountant.
Taxpayers having aggregate turnover up to 2 crore are
not required to file annual return for FY2020-21.
ITR Filing: Missed 31 December deadline? No penal-
ty if you fall in this category Individuals with gross total
income below the basic exemption limit will not have to
pay penalty for filing a belated ITR.
"Till 2021, if a taxpayer missed the ITR filing dead-
line, the maximum penalty he or she would have had to
pay was ?10, 000
"However, with effect from FY21 (AY 2021-22), the
penalty amount has been reduced to 5,000
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10
UDYOG TIMES
IMPORTANT GST UPDATES
APPLICABLE from 1st January, 2022
Tax Gyan
Udyog Times Desk
11. A
notable deceleration in major economies-
including the United States and China-will
weigh on external demand in emerging and
developing economies, according to the World Bank's lat-
est Global Economic Prospects report.
The rapid spread of the Omicron variant indicates that the
pandemic will likely continue to disrupt economic activi-
ty in the near term, the World Bank added.
In addition, a notable deceleration in major economies-
including the United States and China-will weigh on
external demand in emerging and developing economies.
The world economy is simultaneously facing COVID-19,
inflation, and policy uncertainty, with government spend-
ing and monetary policies in uncharted territory. Rising
inequality and security challenges are particularly harm-
ful for developing countries," said World Bank Group
President David Malpass.
"Putting more countries on a favorable growth path
requires concerted international action and a comprehen-
sive set of national policy responses." he added.
Growth in advanced economies is expected to decline
from 5 percent in 2021 to 3.8 percent in 2022 and 2.3 per-
cent in 2023-a pace that, while moderating, will be suffi-
cient to restore output and investment to their pre-pan-
demic trend in these economies. In emerging and devel-
oping economies, however, growth is expected to drop
from 6.3 percent in 2021 to 4.6 percent in 2022 and 4.4
percent in 2023.
India's Growth Prospects
According to the report, India's economy is expected to
expand by 8.3 percent in fiscal year 2021/22 (ending
March 2022), unchanged from last June's forecast as the
recovery is yet to become broad-based. The economy
should benefit from the resumption of contact-intensive
services, and ongoing but narrowing monetary and fiscal
policy support.
In FY2022/23 and FY2023/24 growth has been upgraded,
to 8.7 and 6.8 percent respectively, to reflect an improv-
ing investment outlook with private investment, particu-
larly manufacturing, benefiting from the Production-
Linked Incentive (PLI) Scheme, and increases in infra-
structure investment.
The growth outlook will also be supported by ongoing
structural reforms, a better than-expected financial sector
recovery, and measures to resolve financial sector chal-
lenges despite ongoing risks.
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11
UDYOG TIMES
India to be World's Fastest
Growing Economy in 2022
Driven by Infrastructure Spend, Manufacturing PLI Schemes & Reforms
(In FY2022/23 and
FY2023/24, the World Bank
report has upgraded India's
GDP growth to 8.7 and 6.8
percent respectively, to
reflect an improving invest-
ment outlook with private
investment, particularly
manufacturing, benefiting
from the Production-Linked
Incentive (PLI) Scheme, and
increases in infrastructure
investment.)
Wide Angle
Courtesy- World Bank's Global
Economic Prospects Report
13. 13
UDYOG TIMES
P AN card holders are advised to note that failing to
meet PAN Aadhaar linking deadline, they will have
to pay up to 10,000 penalty for late seeding of PAN with
Aadhaar. Under Section 272B of the Income Tax Act,
failing to link PAN with one's Aadhaar will lead to high-
er TDS and a penalty of 10,000.
Aadhaar PAN link: PAN card holders are advised to
link their Permanent Account Number (PAN) with their
Aadhaar card number by 31st
March 2022. Failing to do this by given deadline will
not only lead to their PAN card becoming invalid but it
would require a fee of ?1,000 for PAN Aadhaar linking.
The problem of the PAN card holder won't end here only
as the individual won't be able to invest in mutual funds,
stocks, open a bank account, etc. where furnishing a PAN
card is must. Apart from this, if the person furnishes the
PAN Card, which is no more valid, then under Section
272N of the Income Tax Act 1961, the Assessing Officer
may direct that such person shall pay, by way of penalty,
a sum of ten thousand rupees.
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S hri Nitin Gadkari calls for manufacturing of Flex
Fuel Vehicles (FFV) and Flex Fuel Strong Hybrid
Electric Vehicles (FFV-SHEV). He was addressing to the
Network of Indian Industries and Enterprises (NIIE)
recently.
He said that it is expected that higher percentages of
ethanol will be blended in gasoline in the next five years,
requiring availability of flex engine vehicles.
Ministry of Petroleum and Natural Gas regulation,
which stipulates that in addition to conventional fuel, the
authorised entities are required to install facility for mar-
keting at least one new- generation alternate fuel viz,
Compressed Natural Gas (CNG), Bio-Fuels, Liquefied
Natural Gas (LNG), Electric Vehicle Charging Points
etc., complying with various statutory guidelines, imme-
diate steps need to be taken to introduce flex fuel engine
vehicles.
Union Minister for Road Transport and Highways
said, the Automobile Manufacturers in India have now
been advised to start manufacturing Flex Fuel Vehicles
(FFV) and Flex Fuel Strong Hybrid Electric Vehicles
(FFV-SHEV) complying with BS-6 Norms in a time
bound manner within a period of six months.
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Flex Fuel Vehicles
are Need of
Today- Gadkari
PAN Card Holders
may get Fined up
to 10,000 after
31st March
NEWS UPDATE
14. LUB's War Footing
Efforts Could Win
GST rate for textiles may not increase from 5% to 12%
from 1st January
Union Ministry of Textiles, after receiving inputs from
industry associations, has now decided to approach the
GST secretariat seeking restoration of the rate of Goods
and Services Tax (GST) to 5 percent, CNBC-TV18
reported.
"The industry is of the view that textile fabric manu-
facturers or fabric weavers will see a significant rise in
their working capital requirements due to the disparity, as
raw material will be taxed at 5 percent and the finished
product will be taxed at 12 percent. So, they are seeking a
restoration of the old rate of percent," the source was
quoted as saying by the report.
Officials told that, "The textiles ministry is opposed to
the rate hike and feels that the industry needs relief. Any
decision which adds to their troubles needs to be flagged.
So, our communication to the GST secretariat is very
clear maintaining status quo on rates and make any
change only after a detailed discussion with the ministry
and the industry stakeholders".
The industry has been clamoring for a reversal as it
feels the move will make its products costlier, which will
impact the sale. Earlier this month, Raymond Group CFO
Amit Agarwal told ETCFO that GST rate hike will deter
demand, and that the company has plans to pass on the
full increase.
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LUB Banaras Felicitate
Railway Minister
A meeting was held by BLW (Banaras Locomotive
Works). On this occasion the Union Railway Minister
Shri Ashwini Vaishnav was there as a Chief Guest. The
office bearers of LUB got an opportunity to honor him.
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New State Unit formed in Goa
An important meeting was held in Goa to form a State
Unit at Panjim on 21st December, 2021. 18 entrepreneurs
were present. Continuous efforts were made in Goa in
order to push and form a state unit. There are 7 small
industrial zones. LUB's officials visited to all the indus-
trial zones and met with entrepreneurs in small meetings.
A state core team is informally formed. But the official
launching will take place only after the election. 11 new
members have already transferred membership fee for ten
years and 27 are in pipe line. A Google Form was gener-
ated for fast process of membership.
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Kanpur Unit shows its
Environ Concern
UPSIDA allotted park of 1200sq mtr at panki site for
maintenance and development to Laghu Udyog Bharati,
Kanpur for 10 year lease.
National Joint General Secretary Shri Rakesh Garg
visited the site and planted a tree in the Park. He appreci-
ated the efforts done by Kanpur unit for this project.
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Chennai Unit organised
Training Program
Chennai Unit organised a Training program to LUB's
members at National Productivity Council, Ambattur
Industrial Estate on 11th December. 69 participants
attended from 30 companies. Unit's senior official Shri
Srinivasan contributed his excellent efforts for the same.
Future planning of Chennai Unit:
1) Plan to associate 154 new members under the lead-
ership of Shri Venugopal.
2) Plan to generate estimated revenue Rs. 2.5 from
Diary under the leadership of Shri Srinivasan.
3) Business Development Team and Grievances Team
are also working separately.
4) Monthly EC meeting to be conducted Twice.
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Odisha Unit Strengthens
the Artigens
LUB's Odisha Unit organised a meeting at Bhubaneswar
on 27th December in presence of National Secretary for
Gram Shilpi Shri Sameer Mundra and Member National
Executive Committee Shri S. K. Sahoo, State President
Shri Tapan Kumar Swain, Regional Director Handicrafts
Ms. Niralaxmi Palai and Eminent Artist Shri Gajendra
Prasad Sahu. On this occasion, 40 artigen from different
sectors like Silver Piligri, Carpenter, Garment, Candel
manufacturer were also present. Ms.Palai asked to every-
one to have their artigen identity card and assured to help.
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14
UDYOG TIMES
LUB's News in Brief
20. 20
UDYOG TIMES
UDYOG OFFICIAL PUBLICATION OF
LAGHU UDYOG BHARATI
Registration No. RAGBIL/2016/69093
Postal Reg. No. : Jaipur City/433/2020-22
An In House Monthly Magazine of Laghu Udhog Bharti, Published by Om Prakash Mittal Printed at
RAJ BLOCKS, B-81, Road No. 4, 22 Godown Industrial Area Kartapura, JAIPUR-302019
TIMES
30 December, 2021