Global SMB Chamber of Commerce makes valuable suggestion for Union Budget 2013-14
Global SMB Chamber of Commerce makes valuable suggestion for Union Budget 2013-14. Wants access to timely and need based finance and access to global market for growth and self sufficiency
Wants access to timely and need based finance and access to global market for growth and self sufficiency
New Delhi, February, 18th, 2013: SMB Global Chamber of Commerce, the premier body representing the interests of some 40 million SMB units in the country would like some of its concerns to be addressed in the forthcoming union budget. In the main they pertain to the following issues:
According to VK Bansal, Hony. Executive Director, SMB Chamber of Commerce, “very few SMB units are registered with District Industries Centre and most of these are either proprietorship concerns or partnership firms, and are largely bereft of a corporate structure. In the interest of efficiency, it is essential these be encouraged to convert themselves into corporate entities.”
The chamber would therefore advocate that the following be given serious consideration for incorporation into the union budget-
-Non applicability of minimum alternative tax to SMBs which have a turnover up to of Rs 200 lacs. This would incentivise SMB entrepreneurs to usher in corporatization of their businesses.
-In case of SMBs with Net Profit up to Rs 5,00,000, the rate of tax may be reduced from existing 30% to 20% .This freeing up of funds would facilitate further investment into SMB ventures leading to a directly positive impact on employment generation in this sector.
-SMBs have minimal access to Bank Finance with only 5% obtaining Bank Finance. The remaining 95% businesses have to make do with borrowed funds procured from family, friends and relatives or from money lenders and NBFCs. Every so often, this funding is in cash. It is therefore further suggested that the cash threshold limited of Rs 20,000/- (which was fixed about two decade back ) be increased to Rs 1,00,000/-.
-In light of the prevailing level of inflation coupled with a slowdown in the economy, it is suggested that the Businesses Excise Duty exemption limit be raised from the present Rs 150 lacs to Rs 250 lacs.
-Earlier Service Tax liability accrued on receipt of consideration for services rendered which currently accrues upon the mere issuing of any invoice. This resulted in a financial mismatch as the normal practice is that payment against invoice is often delayed for 30 to 90 days. In such a scenario, SMBs have to deploy their own fund to deposit Service tax. Therefore it is suggested that payment period of Service Tax may be extended from the 5th of the successive month from the day of invoicing to 90 days from the end of month in which the Invoice is raised.
-Banking & Finance
Traditionally the SMB sector had to turn to non Bank funding for starting a business, for ongoing operations, expansion, modernization etc. Banks have kept the SMB sector at am arm’s length for reasons inexplicable. It is therefore proposed that every Bank should mandatorily be required to operationalise an online portal through which SMB entrepreneurs may submit their loan application and be able to track them. In the event of unnecessary procrastination by a bank, there may be a built in mechanism to escalate the matter to a monitoring agency.
All of the above steps will being about more than a modicum of much required professionalism in this very important, but hitherto neglected segment of the Indian economy.
For Media Details Please Contact:
SMB Global Chamber of Commerce
Page Updated Last on: Feb 18, 2013