Coimbatore District Small Industries Association (Codissia) urges the Union Finance Minister to reduce GST rates by 5 Percent across all slabs to stimulate economic growth and support small businesses facing turnover challenges.
The Coimbatore District Small Industries Association (Codissia) has proposed a significant overhaul of the Goods and Services Tax (GST) structure, calling for a 5% reduction across all tax slabs. This bold request was part of a comprehensive memorandum submitted to Union Finance Minister Nirmala Sitharaman on Monday, aimed at revitalizing the struggling small business sector.
Codissia President M Karthikeyan, highlighting the current economic challenges, stated, "In the prevailing business scenario, all industries in the manufacturing sector are facing a decrease in turnover by around 30%. To improve economic activity, a GST rate reduction of 5% is requested for all slabs." This proposal comes as a response to the significant downturn faced by small and medium enterprises, which form the backbone of Coimbatore's industrial landscape.
The association's request for a blanket 5% reduction in GST rates is seen as a strategic move to stimulate demand, increase cash flow, and potentially lead to higher compliance and tax collection in the long run.
Among other key requests put forth by Codissia is the inclusion of petrol, diesel, and electricity under the GST regime. This move is expected to streamline taxation and potentially reduce operational costs for small businesses heavily reliant on these resources.
On the income tax front, Codissia has proposed reducing the tax rate for partnership firms to 20%. For individual taxpayers, the association suggests lowering the tax rate to 5% for income brackets between ₹5 lakh and ₹15 lakh, aiming to increase disposable income and boost consumer spending.
In a push for sustainable practices, Codissia has requested incentives for adopting green energy. The memorandum proposes an accelerated depreciation rate of 80% for green energy generation equipment and electric vehicles. Furthermore, the association seeks exemption under Section 80-IA for solar power plants installed in the coming years, encouraging investment in renewable energy.
Addressing logistical challenges, Codissia highlighted issues with the current E-way bill system. The association suggested that E-way bills expiring on national holidays, festivals, or Sundays should automatically roll over to the next working day. They also urged for leniency in penalties imposed by roving squads in cases of delays caused by factors such as traffic congestion or road work.
In the banking sector, Codissia called for modifications to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Sarfaesi Act). The association emphasized the need for consultation with industrial bodies to ensure fair practices in the auctioning of properties for loan recovery.
To address the reluctance of banks in providing loans under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme, Codissia proposed establishing a district-level monitoring committee. This committee, to be chaired by the district collector, would include representatives from the district industries centre, lead bank, and prominent MSME associations.
These proposed reforms, if implemented, could significantly impact the operational landscape for small industries in Coimbatore and potentially serve as a model for nationwide policy changes.