Exporters are also awaiting for potential simplifications in the Input Tax Credit (ITC) process in the Budget 2024 Announcement
In the upcoming Union Budget for the financial year 2024-25, there are expectations of key adjustments in the Goods and Services Tax (GST) framework, providing potential relief for small and medium-sized enterprises (SMEs). Finance Minister Nirmala Sitharaman is anticipated to focus on measures that facilitate business operations without making substantial changes to GST rates, given the context of an interim budget during an election year.
One area of expectation revolves around the minimum threshold for GST registration, with SMEs hoping for a boost in the limit. Currently set at Rs 40 lakh for goods (Rs 20 lakh for certain special category states) and Rs 20 lakh for services, an increase to Rs 50 lakh could significantly ease the compliance burden for small-scale suppliers.
Reducing compliance costs is crucial for SMEs, and a higher threshold would allow these businesses to operate more seamlessly. The budget might also shed light on the necessity of GST registration for export-focused businesses, providing clarity for this sector.
Exporters are keenly awaiting potential simplifications in the Input Tax Credit (ITC) process, seeking improvements in efficiency and a streamlined approach. While the Reserve Bank of India (RBI) and the Foreign Exchange Management Act have eliminated the need for the Foreign Inward Remittance Certificate (FIRC), exporters still face this requirement under the GST regime.
Historically, Finance Minister Nirmala Sitharaman has refrained from making significant changes to GST rates through the Finance Bill. Instead, she has opted for amendments to GST rules to bring about reforms in the tax regime. In the previous budget for FY 2023-24, amendments included raising the minimum threshold for initiating prosecution under GST to Rs 2 crore, up from the previous Rs 1 crore.
Despite these potential changes, the government is expected to surpass its GST collection targets for FY24. With monthly collections consistently increasing, there may be upward revisions when the Finance Minister presents the Interim Budget on February 1.
In the first eight months of FY24, GST collections reached Rs 13.32 crore, marking a 12 percent increase from the April-November period in 2022. This positive trend has instilled hope among SMEs across various sectors for potential relief in GST for different goods and services.
As the budget announcement approaches, the business community eagerly awaits insights into these expected changes, which could significantly impact the ease of doing business for small enterprises.
To Access the Expectations of Personal Income Tax Payers from Budget 2024 CLICK HERE
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