Mangaluru: Continuing the fight for reduction or exemption of Goods and Services Tax on labour, Karnataka Small Scale Industries Association (KASSIA) president Basavaraj S. Javali on Monday said he is leading a delegation to New Delhi on Tuesday to meet Union Minister of State (Independent Charge), Ministry of Micro, Small and Medium Enterprises, Giriraj Singh and others.

Talking to reporters, Mr. Javali said since the introduction of GST, labour charges were being taxed at 18%. This levy has seriously impacted cash flows and aggravated capital problems for micro and small industrial units. “As a result, payment for such work is getting delayed and this has rendered a number of units incapable of taking up more jobs for want of working capital,” he said.

Mr. Javali said since one year the association has been fighting to bring labour charges under 5% GST or completely exempt the micro and small industrial units from payment of GST. “Unlike garment units that managed to build pressure on the Centre and get relief, we are yet to find success,” he said.

Mr. Javali said Union government schemes, including the recently announced grant of ₹1 crore loan within 59 minutes, was helping SMEs. “These schemes are good but poorly implemented. Banks are giving loans to old customers and not entertaining new entrepreneurs,” he said.

He said KASSIA was in favour of retaining the present definition of Micro, Small and Medium Scale Industries based on investment in plant and machinery. The change in the definition proposed by the Centre, which was based on turnover, was not in right earnest and pros and cons of such a change should be looked into carefully.