India Budget 2024: ‘Increase in min revenue threshold…’ – Expectations on GST for SME exporters
In less than a month from now, Union Finance Minister Nirmala Sitharaman will unveil the interim budget of the Modi government, just before the Lok Sabha elections 2024. The finance minister is likely to present the Interim Budget 2024-2025 in Parliament on February 1 at 11:00 am.
This will be a day after the economic survey will be presented in Parliament. This year, however, it will not be a full-fledged survey, instead, a ‘concise’ document on the state of India’s economy. President Droupadi Murmu would officially kick off the budget session on the first day by addressing both Houses of Parliament assembled together.
India Budget 2024 Expectations
Even as it will be an interim budget, individuals to industries have high hopes from the government, hoping that it would offer them some relief. Likewise the small industries too are hoping for Goods and Services Tax (GST) relaxation.
“An increase in the minimum revenue threshold for mandatory GST registration from Rs 20 lakhs to Rs 50 lakhs will help small scale suppliers minimize their compliance costs. Additionally, there is a need for clear guidance on the necessity of GST registration for businesses that are entirely focused on exports, considering their supplies are zero-rated,” one of the expert said.
Another key expectation from Interim Budget 2024 is the simplification of the Input Tax Credit (ITC) refund process for exporters. “The current disparity between the documentation requirements of the Foreign Exchange Management Act (FEMA) and GST is a significant hurdle,” according an expert.
While FEMA and the Reserve Bank of India have eliminated the need for the Foreign Inward Remittance Certificate (FIRC), the GST department still demands it to confirm the receipt of export remittances in foreign currency. Aligning FEMA and GST documentation requirements will facilitate smoother operations for exporters, reducing bureaucratic hurdles and expediting the refund process.
“These measures and adjustments to the GST framework will help simplify processes, reduce compliance costs, and enhance operational efficiency for small businesses and exporters,” he said.