People dealing with small companies have made a pitch for changes in the goods and services tax  legislation to avoid cash-flow problems for this sector even as the GST Council takes up crucial bills at a two-day meeting.

The meeting will try to iron out the irritants so that the bills can be tabled in the Budget session of Parliament after the recess and assemblies.

However, tax experts say the proposed provisions are fair.

Bharat Goenka, managing director of Tally Solutions, says the model GST Bill should change the definition of valid return, which is necessary for companies getting input credit, which firms receive for paying taxes on their inputs in production.

Currently, the model Bill provides for paying input credit if firms have paid taxes. Within a month of selling its goods, the company will have to upload its invoice on the Goods and Services Tax Network (GSTN) and pay taxes by the next month. Goenka wants valid return to be one which has been correctly computed, and defines the liability of the taxpayer and not the one that is linked to the payment of taxes. He says the provision will create problems for small businesses.

Most (if not all) will have no bad intent of evasion or not paying. Nor will they be taking the government for granted. It is just that they may sometimes need to delay payment due to exigencies, he said. Tally Solutions is a software product company, primarily dealing with small and medium enterprises. Sometimes companies are forced between choosing whether to pay salaries in time or taxes, according to Goenka, adding that the pressure of paying their suppliers becomes critical.

Indivjal Dhasmana/Business Standard