By Satish Singh
To give relief to businessmen, the Union Ministry of Commerce has given relaxation in the condition of giving priority to “Make in India” in the government purchases of goods related to treatment of corona pandemic. This exemption will be applicable till 30 September 2021. It is to be noted that on 15 June 2017, the Central Government implemented the “Make in India” concept in the rules related to government procurement. This rule was made by the government to promote domestic production of goods and services, increase income of businessmen, employment generation etc. In other words, the purpose of this rule is to give economic incentives to domestic manufacturers to increase production of various products. According to this rule, if the government procurement is less than Rs.50 lakh, then the concerned ministry or department will have to give priority to the local suppliers. If the government purchase is more than Rs.50 lakh, then the ministry or department will have to make 20 percent of the purchases from local suppliers. It is noteworthy that this rule is applicable in government procurement of all types of goods and services.
Central Board of In-Direct Taxes and Customs (CBIC) has given priority to refund of excess tax paid for giving relief to Micro, Small and Medium Enterprises (MSMEs) and settlement of duty drawback claim in the second fortnight of May is introduced. According to CBIC, at present there is a need to settle the refund of excess tax payment by MSME and the claim of duty drawback at the earliest, so that MSME can get immediate relief in the corona pandemic period.
To provide relief to the MSMEs, CBIC has also reviewed the notices issued due to minor reasons in cases of refund of excess payment of tax to the MSMEs taxpayers. The CBIC has made plan to refund excess paid tax and duty drawback to MSMEs taxpayers as soon as possible. The MSME is expected to get some relief from these steps taken by the government. However, the government also needs to settle the pending claims related to Goods and Services Tax (GST). In this order, the government should also arrange to refund of input tax credit for exports, refund of additional tax payment etc. It is expected, if the government takes this move, the common men and MSMEs will get more relief.
Prime Minister Narendra Modi distributed the eighth installment of Pradhan Mantri Kisan Samman Nidhi scheme on 14 May 2021 through video conferencing. Under the Pradhan Mantri Kisan Samman Nidhi scheme, the central government gives Rs.6,000 every year to each farming family. This amount is given in three equal instalments of Rs.2,000. After every 4 months this amount is directly transferred to the bank account of the farmers. So far, 1.16 lakh crore rupees have been transferred to the farmers’ account under this scheme,earlier, on December 25, 2020, Rs.2000 was transferred to the account of about 9 crore farmers under the seventh installment of Pradhan Mantri Kisan Samman Nidhi scheme.
In the form of the eighth instalment, more than 9.5 crore rupees were transferred to the farmers. More than 20 thousand crore rupees has been spent over this. It is noteworthy that the Pradhan Mantri Kisan Samman Nidhi Scheme was announced in the interim budget in the year 2019, but the scheme had implemented in December 2018. In the eighth instalment of Pradhan Mantri Kisan Samman Nidhi scheme. First time more than 7 lakh farmers of West Bengal have been given financial assistance of rupees two thousand. So far, about 1 lakh 35 thousand crores have been deposited in the accounts of about 11 crore farmers of the country. Under this scheme, more than Rs 60,000 crore has been deposited in the accounts of farmers during the corona period.
To give relief to the farmers, the government has directed the banks to extend the date of repayment of all short-term loans up to Rs 3 lakh for agricultural and allied activities to 30 June 2021. The government has also given instruction to banks to give the benefit of 4 percent interest subvention to farmers in this extended period. The Banks will also charge 2 percent lower interest in those loan accounts in which timely payment of instalment and interest are being deposited. In the Corona era, the government is running a scheme of providing free ration for poor people. Through the Pradhan Mantri Garib Kalyan Anna scheme, free ration had given to the poor up to 8 months in the year 2020. This year also, it is proposed to givefree ration to the more than 80 crore needy people of the country.
In the 43rd meeting of the GST Council to be held on May 28, it is proposed to give relief to MSMEs. The second wave of the Corona pandemic has resulted in a significant decrease in sales of two-wheelers. Therefore, in the proposed meeting, it is proposed to make a logical cut in the GST rate on two-wheelers. It is proposed to bring the gas coming through pipes in the houses under the ambit of three-tier GST structure. The lowest tax rate for gas used in households can be 5 percent, 18 percent for gas used for commercial purposes and 28 percent for CNG used in vehicles. In this meeting, removal of GST being taken on vaccine can also be considered.
There is also a need to bring reforms in tax structure in areas such as fertilizer, steel utensils, solar modules, tractors, tires, electrical transformers, pharma, textile, railway locomotives etc. In many products, imposed tax on raw materials is more than finished goods. For example, a 10 percent tax is levied on imported tires, while raw materials attract a duty of 20 percent. Similarly, there is no duty imposed on solar modules, while the components used in it charge tax between 5 and 10 percent. MSMEs can get some extent of relief in the Corona period if such anomalies will remove immediately.
During the Corona period, the MSMEs, laborers and farmers need to be given maximum relief. Keeping this in mind, the government has taken some measures for MSMEs, laborers and farmers, but there is a need to provide more relief in the matter, because even though the second wave of corona virus has not imposed a nationwide lockdown, but in many states Economic activity has been affected due to the imposition of lockdown. Therefore, there is a need to provide more relief to MSMEs, laborers and farmers at the earliest.
(Author is Chief Manager at State Bank of India, Mumbai. The views expressed are personal opinion of the author. He can be reached at satish5249@gmail.com and singhsatish@sbi.co.in.)
