Chennai, June 14 (KNN) Some of the micro industries in Tamil Nadu have reportedly halted their production ahead of GST rollout from July 1, 2017, fearing loss of input tax credit on the inventory held by them.
Some units have stopped executing the orders that they have already received.
Meanwhile, talking to KNN, Tamil Nadu Small and Tiny Industries Association (TANSTIA) said the units have not stopped production. However, there are speculations that micro units will in the long run be adversely impacted by GST.
TANSTIA President C Babu said, “Micro units are considered to be the backbone of an economy. Earlier we were paying just one tax –VAT, but now we will pay three – IGST, SGST and CGST.”
He said micro unit is an one man show and to fulfil the requirements to pay taxes under GST would require accountants.
“There will also be server capacity problem. And under GST, e-bills are required. So what if the lorry is loaded and server is not working,” he asked.
Further, C Babu said micro units don’t have the required manpower and infrastructure to meet the requirements under GST.
“The MSMEs are demanding one tax not three. The problem also is that micro units get businesses from large companies and if they fail to take loads on themselves , they will stop getting businesses,” he said adding government should do something to help them.
Once implemented, impact of GST on micro units can be seen within six months, he added. (KNN Bureau)