Days after the US announced the irrational 50 percent tariffs on imports from India, the government’s latest GST rationalisation exercise is without doubt a rare opportunity for our small businesses to breathe easier.
They have long struggled with a tax regime that is complex, fragmented and capital-draining, and add to it the weight of Trump’s added tariffs.
The first thing that stands out in the recent GST reform discussions is the trimming of four slabs into a simpler two-tier structure. This will cut away the red tape that choked enterprises of both time and money. In short it means no more endless battles with inverted duty structures, and no more refunds stuck in the system.
Equally important is the impact these reforms will have on the working capital for MSMEs. The proposed
automated, pre-filled GST system will not only be faster and more efficient but also help MSMEs get the much-needed liquidity on time through refunds-capital that can be channelled into growth and expansion.
Once implemented, it will save MSMEs from getting trapped in the bureaucratic red tape and reduce the
amount of manual work they do. The proposed reforms will also fuel our “Make in India” ambition and will make our MSMEs more competitive at the global level. The goods manufactured in India will attract more global buyers.
While we cannot control tariffs imposed by other nations, we can strengthen our internal economy. This reform builds the resilience our businesses need to withstand and overcome such external shocks.
In a nutshell, the recent announcements may be more than rate rationalisation. For our entrepreneurs, this could be liberation.
