More than 30% of total jobs are generated by Small and Micro-enterprises (SMEs), may be of low and middle-income. Recent Credit-guarantee scheme (CGS) for SMEs by Central-Govt. is indeed an excellent support for availing liberal bank-credit up-to Rs.5.0 Crores.
Since 2003, manufacturing SME-units (excluding medium-scale) were availing Excise-exemption on the initial turnover of Rs.1.50 Crores. That amounts to Rs.22.5 lakh/annum considering average excise-rate as 15%. By this, SME units were able to compete with larger-units despite higher production-cost and lower sale-price due to poor brand-image. After GST regime, these benefits were not available.
Considering inflation, now such benefit should be suitably increased, say up-to Rs.45-50 lakhs/annum by reimbursing net-GST (CGST and SGST) payable after availing input-tax credit. For non-manufacturing SMEs, the benefits may be limited to Rs.8-10 lakhs/annum. Existing scheme of GST-exemption on the sale of Rs.40 lakhs may continue for micro-units with an option to switch-over to new-scheme. Also, GST law-compliance may be simplified for SMEs. Such radical-changes shall revitalize SME-sector and many of them might be graduated to Medium-scale in future generating more jobs. By this, a team of Job-providers shall be boosted and the subsidy-burden on both governments shall reduce in future-years.
