Cuttack: Many young entrepreneurs here have alleged that the industries here were severely hit by the hasty implementation of the Goods and Services Tax (GST) by the Centre.
At a time when around 250-odd industrial units in the district have closed down due to several reasons, the faulty implementation of GST has proved to be a double whammy.
Economists had endorsed GST as it was expected to simplify the indirect tax system. However, as the Centre failed to scientifically implement the tax reform initiative has proved it to be counterproductive, said sources.
Moreover, frequent changes in tax rates and slabs on goods and services have made the process more complicated and the entrepreneurs are bearing the brunt. There is a kind of financial instability prevailing in the country. The untoward development has hit the micro, small and medium enterprises hard, the sources added.
According Orissa Young Entrepreneurs’ Association president Ananta Tripathy, “The imposition of GST is a policy of the Centre to exploit the industrialists. In a given month, the entire time is spent on filing returns, registration and keeping the records. There is no time to think about the growth of the business. On the 3rd of every month we have to show all the records of sales, purchases and the work on tax filing. Any deviation from this will invite penalty.”
Explaining details of the inconvenience he faced, Tripathy said, “If we purchase goods from outside the state, we have to submit the details of the consignment by 10th of every month. Similarly, details of sales outside the state would have to be sent to the government by 15th of every month. If any businessman fails to file tax returns by 20th of every month, he is liable to pay Rs 200 penalty for every day. I’ve paid a penalty of Rs 17,000 in September this year,” said Triapthy.
The volume of business has witnessed a significant fall, post-GST scenario, he rued, adding it would be better to close down the shop instead of running it.
Likewise, Orissa Small Industries Association president Dipak Kajaria said, “We had welcomed GST, but we were not aware of so much of complexities in its implementation. We have to run after advocates and chartered accountants for filing of tax returns.”
Citing an example Kajaria said, small scale firms are largely dependent on the government insofar as sale of goods is concerned, but it takes at least four months for the payments against the bills. The delay, on the other hand, involves penalty, he added.
“Our perception that GST would help flourish small scale industry has changed now. It has ruined the micro and small scale establishments,” Kajaria added.
The implementation of one of the major tax reforms has been proved to be counterproductive as it has spread an atmosphere of uncertainty and industrial sluggishness. About 256 industrial units had faced closure earlier due to several reasons which has rendered about 20,000 people jobless in the district.
Significantly, four industrial units have written to the District Industries Centre (DIC) informing the latter that they were closing down their firms over the past few months. The prospects of reopening of closed firms are now gloomy as most of them have run into bankruptcy.
If more such industries are closed, it would wreak havoc to the industrial economy of the district, said a businessman.
General manager of DIC Shyamacharan Das, who declined to comment on GST implementation, said that the start-up policy would help in industrial recovery of the district.
“We are preparing a list of start-up projects. Young people who complete their technical degrees will be encouraged to take up start-up ventures. Those who would take up independent projects or invent anything by utilizing their own ideas would be awarded with Rs 50,000. They can also get an incentive of Rs 3,00,000 if they are going ahead with their own invention.”
Das said the government is stressing on industrial awareness programmes, identification of budding entrepreneurs, and provision of industrial infrastructure.
The DIC is promoting coir based and Khadi industries in the district, he added.
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