PM Modi says India may announce tax relief for traders next week
NEW DELHI: India may announce measures next week to help traders and small businesses who say a new nationwide goods and services tax (GST) has increased their tax and administrative burden.
Prime Minister Narendra Modi said if there is consensus at the next GST council meeting due over November 9 to November 10, the government would take the necessary steps to help traders and strengthen the country’s economy.
A panel of ministers last month recommended reducing tax rates for small businesses and traders and raising the minimum revenue threshold for companies that need to pay tax, local media reported.
The launch in July of the long-awaited GST, which transformed India’s 29 states into a single customs union, has left thousands of small and medium-sized firms at the bottom of the supply chain short of working capital.
Modi is facing criticism for the disruption to the economy caused by the roll-out of GST and the shock removal of higher-value bills from circulation last year. As a result of these issues India’s economy is expected to grow at its slowest pace in four years this fiscal year, a Reuters poll found.
Modi’s comments came days after India jumped about 30 places to 100th on the World Bank’s “Ease of Doing Business” rankings, reflecting reforms in accessing credit, power supply and the protection of minority investors.
Modi said he expected India’s ranking to improve next year when the GST and other reforms were considered.
“There are many other reforms that have already happened but need gestation and stabilization time before they are taken into account by the World Bank,” Modi said.
He added that there were other reforms on which India and the World Bank would need to find common ground.
Modi said along with manufacturing, India was also pushing for faster progress in developing infrastructure and was working to improve the investment climate.