Will push for GST reforms, single licensing for traders in Modi 3.0: Praveen Khandelwal

Praveen Khandelwal

Bharatiya Janata Party member of Parliament Praveen Khandelwal, who won for the first time from the Chandni Chowk constituency in the national capital, and who is also the secretary general of the Delhi-headquartered Confederation of All India Traders or CAIT, said his agenda will be to represent the voice of traders and focus on issues related to easing compliance norms, refining the goods and services (GST) tax regime and scrapping of old laws.

Khandelwal is also hopeful of pushing through measures to boost ease of doing business. “The next five years will be a golden period for trade and small businesses,” Khandelwal said.

“Modi 3.0 will give a boost to ease of compliances for businesses with a focus on GST reforms, decriminalisation of old laws, e-commerce policy and push for single licensing," Khandelwal told Moneycontrol. “The focus is on the issue of simplification and rationalisation of GST. There is a need to ease GST compliance for businesses. It will boost voluntary compliance and revenue. The compliance should be easy for small businesses. The endeavour is to project GST as a tool for robust development of trade and economy,” Khandelwal said in the interview.

GST collections for April 2024 breached the landmark milestone of Rs 2 lakh crore.

“The GST revenue is still less, it needs to increase more. More inclusion of businesses under GST is needed. Many businesses are above the threshold and still not registered under GST. It should be simplified for ease of doing business,” he said.

The threshold for GST registration for businesses is Rs 40 lakh annual turnover for goods and Rs 20 lakh for services. In the past 10 years of the Modi government, small businesses have got a boost via the MUDRA Yojana, which aims to channel loans to entrepreneurs on easy terms, the artisan-focused Vishwakarma Yojana, etc. The GST system has undergone 1,400 tweaks to make it more business-friendly, and will become more so as the government continues to make amendments in the law, he added.

One nation, one licence

On the lines of the GST's one nation, one tax, there should also be one licence that is valid across the country, Khandelwal maintained, pointing out that securing multiple permits is a hindrance to economic activity. "For agricultural business, a licence or registration with the Agricultural Produce Market Committee (APMC) is needed. For the foods business, a food safety and standards licence is needed,” Khandelwal said.

Currently central, state and local corporation licences are separately issued, including for food safety and those governing Shops and other establishments.

Repealing old laws

Many laws relating to businesses are redundant, which need to be decriminalised or abolished, Khandelwal  said.
“The Shops and Establishments Act (each state has its own version of this) needs to be either abolished or amended. Obsolete laws are not needed now. According to the law, every year a shop needs to be whitewashed, which is not feasible in today’s times. For the last 70 years, the laws are still the same. There is a need to remove inconsistency, else compliance will be difficult. We are working on it,” he added.

E-commerce policy

The first-time MP said that as far as the e-commerce policy is concerned, a consensus between largely online multinational corporations and local brick-and-mortar businesses is already reached. According to the policy, yet to be formally announced, a grievance mechanism will be required on every portal. The policy is expected to streamline rules on ownership of inventory by e-commerce platforms, he said.

45-day MSME payment rule

On the provision that companies must make full payments to micro, small and medium enterprises (MSMEs) within 45 days to claim tax deductions, which came into effect from April 1, Khandelwal said that he will push for its deferment by at least a year.

“The trading community should be educated about the payment rule by holding workshops and seminars for a year after which the rule should be implemented,” he said.

Manufacturing

In order to boost manufacturing and create jobs, he said that trade zones outside cities need to be developed for which supporting policies are required from the government. These trade zones can be created for specific commodities as it will reduce production and logistics costs. Such zones will allow for processing, packaging and manufacturing at one point, and will strengthen rural employment and reduce the infrastructure burden on cities if the proposal to situate them outside these urban clusters goes through.