MSMEs in 2023 : Key changes related to GST
MSMEs in 2023 : Key changes related to GST
The 2022-23 Economic Survey emphasized the rebound of Micro, Small, and Medium Enterprises (MSMEs) post-pandemic. Although GST payments by MSMEs dipped in FY21, they exceeded pre-pandemic levels in FY22, reaching approximately Rs 5.5 lakh crore. This upturn underscores the financial strength of small businesses, credited to government interventions directed at MSMEs. The survey highlights the MSME sector’s recovery from the pandemic impact, evident in the increasing trend of GST contributions and the key changes related to GST for MSMEs in 2023
Economic Activity Index for MSMEs
Jocata, a financial advisory and technology firm, has unveiled a collaboration with SIDBI to launch the MSME Economic Activity Index – Sumpoorn. This index, derived from consent-led and anonymized monthly sales data from over 50,000 credit-seeking MSMEs, is a composite diffusion index adjusted for relative amplitude. Unlike traditional survey-based methods, it leverages official GSTN returns spanning from October 2019 to the current date.
Establishment of Non-GST Entities
Registration for the Udyam certificate, targeting informal micro units (IMEs) not under the GST regime or exempted from the CGST Act, 2017, has surpassed one crore. According to Udyam portal data, 1.10 crore IMEs are now officially registered under Udyam. The Udyam Assist Platform (UAP), introduced in January, facilitates the formalization of these units within the economic framework.
Lowered Turnover Limit for E-Invoicing
In May, the Central Board of Indirect Taxes and Customs (CBIC) declared a decrease in the turnover threshold for e-invoicing, applicable from August 1, 2023. Businesses with a turnover surpassing Rs 5 crore (revised down from Rs 10 crore) in any fiscal year must now generate e-invoices for business-to-business transactions. This adjustment seeks to encompass a greater number of small enterprises falling within the Rs 5 crore to Rs 10 crore turnover range, while micro-enterprises (with turnover less than Rs 5 crore) currently remain exempt from e-invoicing requirements.