Budget 2019: Startups seek enforcement of timely payment rule, GST relief from govt

Finance minister has announced a slew of measures in her maiden budget. These measures are aimed at ending the harassment of start-ups at the hands of tax officers and giving more freedom to start-ups in managing their affairs.

However, start-ups are seeking more concrete action from the government that will help them. These measures are related to ensuring timely payment to them, relaxations under the GST regime and timely refund of input tax credit (ITC) and several other things.

Except for a few large startups, most of the start-ups also fall in the category of small and medium industries.

Under the extant rules, companies are required to clear dues of an SME unit within 45 days of generation of invoice.

However, if the larges companies delay the payment to SMEs then there are no penalties on them. They are just required to disclose this thing in their balance sheets.

Whereas, all companies, including startups and SMEs are required to pay GST to the government at the time of generation of invoice.

This system is hurting startups and SMEs in two ways.

On the one hand, they are required to pay GST to the government on the day of generation of the invoice,

on the other hand,

the payment due to them is delayed for months and the government is not able to its rule to clear the payment of GST within 45 days.

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