The All India Manufacturers'Organisation (AIMO) has asked the Centre to postpone the implementation of goods and services tax (GST) to October 1, as the industry has no time to prepare for the new tax regime.
The organisation had, in January, released a study that said the country's micro, small and medium enterprises (MSMEs) were expected to witness a 60 per cent dip in employment, besides incurring a revenue loss of 55 per cent before March, 2017. The decline was seen as an impact of the demonetisation drive undertaken by the Centre since November 8.
According to the manufacturers' body, a majority of the companies in the sector are limping back to normalcy post demonetisation and the proposed GST
rollout on July 1 does not allow them enough time for transition into a new tax structure.
The organisation also raised an an issue with the proposed deadline saying that rates are yet to be finalised and a final scheme is yet to emerge under GST.
"It is impossible for any industry to suddenly change their tax structures and make price modifications within just two weeks. It will only subject us to a chaotic situation, besides causing confusion and losses. It is impossible for the MSME sector to adapt to the change within a short time and it certainly requires a professional support of an auditor to help them manage on a daily basis," said the organisation in a statement on Thursday.
AIMO has, on an earlier occasion, requested Finance Minister Arun Jaitley and Commerce Minister Nirmala Sitharaman to extend the time given to various industries for GST
adoption to three months, following the completion of the clearance process and the fixation of all tax structures. This could help the industries to recast their costing and sales price and be ready for change.
"Unfortunately the government is keen on doing things at its own pace and convenience. It is not mindful of the sufferings of industries," it said.
The manufacturers' body has also warned the government of serious repercussions in case the industry is not given much time for adapting to a major change in tax collection. "Allow us a timely recovery from the demonetisation shock and give us time to implement," added the organisation.