PANAJI
Union Finance Minister Arun Jaitley has reduced the tax liability by 5% of a number of micro, small and medium enterprises (MSMEs) by making an announcement while presenting the Budget 2018 on Thursday. The fact that most companies in Goa fall in the bracket of MSMEs means that it is a good move for Goa’s industrial sector.
Jaitley reduced corporate tax rate from 30% to 25% on all companies, which have reported turnover up to Rs 250 crore in the financial year 2016-17. In the previous budget, Jaitley had reduced the tax rate to 25% for companies with an annual turnover of less than Rs 50 crore. But, in the latest budget, the tax reduction is applicable to companies with an annual turnover of Rs 250 crore, which is much higher.
Vinesh Pikale, a chartered accountant (CA) from Panaji, said, “The corporate tax rate was reduced to 25% earlier for companies with less than Rs 50 crore annual turnover. Now, this has been extended to companies with a turnover of upto Rs 250 crore. Therefore, more companies will benefit due to lesser taxation now.”
Jaitley also proposed to get public sector banks and corporates on a ‘Trade Electronic Receivable Discounting System (TReDS)’ platform, which will be linked to GSTN (Goods-and-Services-Tax system). This system is going to address working capital related financing needs of companies.
Pikale said, “We will have to see the details of the system proposed. But, by connecting with GSTN network, the government will be able to see the credit-worthiness of a business based on which financing will be extended.”
A number of small companies find it very difficult to raise finance from the banks. However, with the roll-out of GST last year, the Central government has a lot of data about the traders, which can be used to provide finance to them.
Manguirish Pai Raiker, chairman of National Council for MSME (micro, small and medium enterprises) at ASSOCHAM, said, “It’s an innovative thought to link GSTN with data to provide finance to companies. It will remove working capital hurdle for many companies.”
