Daijiworld Media Network - Panaji
Panaji, Oct 9: The latest Goods and Services Tax (GST) reforms are expected to ease working capital pressures on industries in Goa by allowing refunds of input tax credit accumulated on input services and plant and machinery, a representative of Laghu Udyog Bharati (LUB) has said.
Gaurav Kenkre, chairman of the taxation committee of LUB, said the measures approved at the 57th GST Council meeting would address long-standing structural bottlenecks and benefit sectors such as pharmaceuticals, shipbuilding and packaging in the state.
Chief Minister Pramod Sawant attended the GST Council meeting in Delhi on Thursday.
Kenkre said industries operating under an inverted duty structure, where the GST paid on inputs is higher than the tax charged on finished products, often face significant amounts of input tax credit getting locked up. While manufacturers could claim refunds on input goods, refunds on credit accumulated from input services and capital expenditure, including plant and machinery, were not available, creating working capital constraints.
The revised measures are expected to help manufacturers investing in new production lines or upgrading existing facilities recover a portion of the tax credit otherwise tied up in their operations.
Kenkre said the revised process provides for automatic provisional sanction of 90 per cent of refund claims based on risk assessment. The time for issuing refund orders has also been reduced from seven days to three working days after acknowledgement.
He said the changes could improve cash flows, free up funds for productive use and strengthen the competitiveness of Goa's manufacturing sector. The measures are expected to be particularly relevant for industries making substantial investments in machinery, production facilities and services.
The GST Council also approved changes to tax administration, including removing GST officers' power to arrest taxpayers and raising the threshold for criminal prosecution to Rs 5 crore. Other measures include a simplified registration process for small suppliers selling through e-commerce platforms, easier procedures for amending GST registrations and reduced penalties.
The Council also approved the formation of a committee of officials to address the transition towards invoice matching for input tax credit claims.