Page 11 - Banking Finance March 2019

GST UPDATE

MSMEs created 2.46 lakh more jobs post GST Refund Claims must be

India's micro, small and medium enterprises (MSME) sector not only survived sanctioned in Cash after
demonetisation but created 246,416 more jobs than
those which existed before it was implemented, a re- GST Rollout: CESTAT
cent survey released by the India SME Forum shows. The Customs, Excise and Service Tax
While the MSME sector has largely welcomed the Appellate
implementation of Goods and Services Tax (GST), the Tr i b u n a l
immediate effect of demonetisation resulted in job (CESTAT),
losses in many MSMEs. Chandigarh
States where over 80 per cent of MSMEs shed their staff were Jharkhand (94 bench has
per cent), Tamil Nadu (91 per cent), Punjab (89 per cent), Bihar (88 per cent), held that
Assam (87 per cent), Uttar Pradesh and Himachal Pradesh (both with 86 per the authorities cannot credit the re-
cent), Chhattisgarh (85 per cent), Kerala (84 per cent), Haryana (83 per cent) fund claims in Cenvat credit account
as well as Goa (82 per cent). after the rollout of Goods and Ser-
vices Tax (GST) from 1st June 2017.
The survey data shows all those who were retrenched -- including those em-
ployed on contractual, cash, temporary or seasonal basis -- were hired back by The appellant filed refund claims of
the MSMEs. The negative after-effects were found to be rather short-lived as unutilized amount lying in their
seen in the survey data about new employees. Cenvat credit account under Rule 5
of Cenvat credit Rules 2004, on ac-
Nearly 66.6 per cent of MSMEs surveyed collectively hired an additional 246,416
people in the 18 months from April 2017 to September 2018 at an average of count of export of goods. The refund
claims partly allowed in cash and
9.776 jobs per MSME unit and an overall average of 6.50 jobs created per unit
on including all the MSMEs surveyed. Significantly, despite being criticised for partly credited in Cenvat credit
the way in which GST was implemented, MSMEs across the country welcomed account. Before the authorities,
it. Data shows that 62.13 per cent of MSMEs surveyed termed GST as the single the appellants contended that after
the introduction of Central Goods
biggest reform or that it made running a business easier, though 9 per cent of
and Service Tax Act, 2017 all
them said that more work is needed to implement GST.
refund claims are to be sanctioned in
Only 28 per cent of MSMEs held the introduction of GST responsible for MSMEs cash.
going out of business or for GST making business tougher. The survey was con-
ducted during October to December 2018 in 23 states across the country with They further sought to modify the or-
37,680 respondents. President of India SME Forum Vinod Kumar said: "MSMEs ders of sanctioning of refund claims
seem to have given a thumbs up to the Narendra Modi despite demonetisation in Cenvat account for granting the
as well as a few issues regarding the implementation of GST. I am particularly refund claims in cash. The Tribunal
intrigued by their buoyant mood and their job generation capability even in a noticed that on introduction of Cen-
market phase with subdued sentiments." tral GST Act, 2017, Section 142 deals
the situation which directs the au-
GST Scam detected - Fraud of Rs 141 crore thorities to sanction all the refund
The Directorate General of Goods and Services Tax Intelligence in Chhattisgarh claims in cash, therefore, no author-
has detected a fraud of Rs 141 crore,. Two persons ity can sanction refund claim to be
have also been arrested in this connection. Central credited in Cenvat credit account.
GST and Excise department of Raipur has un- "In that circumstances, I modify the
earthed the scam. impugned orders to the extent that
"The proprietor of Shyam Sales Corporation Aayush refund claims are to be allowed in
Garg and his partner Santosh Agrawal were taken into custody. The firm deals cash, instead of crediting in Cenvat
in iron products," said an official. "The firm in its records, has shown that it had credit account. Accordingly, the ap-
purchased raw material of Rs 141 crore from 12 Odisha-based companies that pellant has entitled the refund claims
actually don't exist," the official said. in cash," the Tribunal said.

BANKING FINANCE | MARCH | 2019 | 11