Bengal gets respite in key sectors after GST review

Kolkata: The two successive review meetings of GST Council have finally come as a breather for Bengal industries.
From micro, small and medium enterprises (MSME) and textile (mostly knitwear) to leather and jewellery, all the sectors where the state has a major stake got some respite. Bengal commerce and industries secretary Rajiva Sinha welcomed the council’s decision.
“The state was arguing for this,” Sinha said.“Finally, we got some respite. All these three sectors — leather, gems and jewellery, and textiles — are very important for us. A lot of people are employed in this sector.” These sectors together employ over 20 lakh people in the state.
The GST Council has proposed a composite scheme for MSMEs with a turnover of up to Rs 75 lakh. Under this scheme, traders have to pay only 1% and manufacturing sector in this category has to pay 2%, if they opt for this. In leather and textile, GST on jobwork has been reduced from 18% to 5% at Monday’s meeting. Gems and jewellery trade too got the same breather.
Fosmi president Biswanath Bhattacharya feels the decision of the council is a good step for SME as a whole. However, he expressed concern about technicalities of GST. “If there is a mistake in filing, there is provision for penalty. But, we feel MSMEs should be exempt for six months from this,” Bhattacharya added.
H K Guha, president of Federation of Associations of Cottage and SSIs, shared the apprehension of the Fosmi president.
Rishabh C Kothari, chairman, MSME of MCC Chamber of Commerce, and director of CKC Fragnance, pointed out that the changes announced by the finance minister in the composition scheme will go a long way in alleviating the difficulties the micro- and small-scale sectors are likely to face under the GST regime. “The lowering of GST rates on products essentially manufactured by MSME sector such as incense sticks, kites, pickles and sauces will also give some relief to these industries while maintaining revenue neutrality for the government,” he said.
Pankaj Parekh, former national vice chairman of Gems and Jewellery Export Promotion Council, pointed out that reduction of GST in jewellery job work from 18% to 5% was a major step. However, he added that 3% on job work would have been better. The GST on gold and gold jewellery is 3%.
Sanjay Jain, vice president of WB Hosiery Association, and Ramesh Juneja, regional chairman of Council of Leather Exports, lauded the cut in GST on job work in leather and hosiery.