(MENAFN- KNN India) MSMEs face liquidity crisis, industry in Punjab out of cash to pay workers their wages
New Delhi, Sept 26 (KNN) With the Goods and Services tax almost nearing the end of third month since its implementation and issue of liquidity crunch coming up, the Micro, Small and Medium Enterprises are feeling the heat of the new taxation.
As a result the workers at these MSME units are not being able to get their wages paid.
Talking to KNN, Badish Jindal President, Federation of Punjab Small Industries Association informed that the industrial sector, especially the Micro, Small and Medium Enterprises are running out of capital to run their industries.
As of now, over 50-60 per cent of the working capital is stuck with the GST authorities, there is no clarification nor any hope regarding the release of these funds, leaving the MSMEs into a fix situation.
Jindal said that the government themselves acknowledge that there is huge amount that is piling up with the tax authorities.
While the government maintains that this isn't a new phenomenon, this claim is not true in fullest sense, Jindal said.
'Earlier too there must have been piling of the working capital with the tax office, but then the release of funds used to be timely and smooth, whereas under the Goods and Services Tax, it's happening otherwise.
Lamenting upon the overall condition of the MSMEs associated with his Federation in Punjab, he informed that with a huge chunk of working capital stuck, not only do the units don't have cash to pay for its workers, the business operations are also on a bumpy ride.
While these problems persist, the MSMEs are also worried over the implementation of the eWay bill provision that is set to roll out soon.
Jindal said that when a fair share of the Indian demography is yet to avail basic electricity, in such a scenario how are the businesses expected to get tech savvy and keep up with the digital demands under the new taxation. (KNN/ DA)
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