Micro, Small, and Medium Enterprises (MSME) play a crucial role in the Indian economy, contributing significantly to manufacturing output and export earnings. To support and promote the growth of the MSME sector, the Indian government provides various tax benefits. These tax incentives aim to reduce the tax burden on MSME, encourage entrepreneurship, and foster economic development. In this article, we will explore the various tax benefits that MSMEs can avail. 

Concessional Tax Rate: 

One of the significant tax benefits available to MSMEs in India is the concessional tax rate. Under Section 115BA of the Income Tax Act, 1961, certain domestic manufacturing companies, including MSME, are eligible for a reduced tax rate of 25% instead of the standard rate of 30%. To qualify for this concessional tax rate, the company must have a turnover of up to ₹400 crore and be set up and registered on or after March 1, 2016. However, companies availing this benefit are not allowed to claim specified deductions, set-offs, or carry-forwards. 

Additionally, MSMEs can also opt for a tax rate of 22% under Section 115BAA by fulfilling certain conditions. This reduced tax rate allows domestic companies, including MSMEs, to calculate their total income without considering various deductions, depreciation, and set-offs. Furthermore, companies availing this benefit are exempted from the payment of the maximum alternate tax under Section 115JB. 

New manufacturing domestic companies have the option to choose a 15% tax rate under Section 115BAB, provided they meet specific conditions. This section includes all the conditions under Section 115BAA and further requires the company to be set up and registered on or after October 1, 2019. It also mandates that the company cannot claim deductions under Section 80-ID and cannot be engaged in any other businesses. 

Presumptive Tax Scheme: 

MSMEs can benefit from various presumptive tax schemes, which allow them to reduce their tax liability. These schemes are available subject to specific conditions. For example: 

1. Section 44AD: Eligible businesses with a total turnover or gross receipts of ₹2 crore or less can opt for this scheme. It provides for a presumptive taxation system where the income is calculated as a percentage of the total turnover, and no detailed accounting is required. 

2. Section 44ADA: This scheme is available for professionals, such as doctors, lawyers, architects, etc., whose total gross receipts are ₹50 lakh or less. Similar to Section 44AD, it offers a presumptive taxation system for professionals. 

3. Section 44AE: Good carriage businesses can choose this scheme. It provides a presumptive tax calculation based on the number of vehicles owned and utilized for business purposes.  

Conclusion: 

The Indian government recognizes the vital role played by MSMEs in the country’s economy and supports their growth through various tax benefits. By taking advantage of the concessional tax rates, presumptive tax schemes, and other incentives provided by the government, MSMEs can optimize their tax planning and reduce their tax burden.  

Apart from tax planning, MSMEs also need to focus on how they manage their business finances to stay afloat. IndusInd Bank understands this and offers specialized current account solutions that help streamline your business operations, including tax-related transactions. 

Open IndusInd Bank Current Account to enjoy:  

• Industry-specific current accounts 
• Flexible cash deposit limits 
• A range of digital payment solutions, including POS devices, QR codes, Soundbox 
• Premium doorstep banking services 
• Digital account opening service via Video KYC 

Open IndusInd Bank Current Account, NOW! 

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision.  IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.

As a carrier, issuing a waybill to transport goods is a standard procedure. It’s a document that contains vital information about the consignment, including the consignor, origin point, transporter, consignee, and destination. To comply with the Central Board of Indirect Taxes & Customs, this information must be uploaded to the Goods and Services Tax (GST) portal, generating an electronic waybill or e-way bill. Let’s delve into the details of e-way bills, their format, and their significance for MSMEs. 
 
What is an e-way bill? 
An e-way bill is a legally required document for moving consignments to their destinations. It serves as a compliance mechanism where you upload all relevant shipment information to the official GST portal before shipping. According to Rule 138 of the CGST Rules, 2017, registered carriers transporting goods worth over ₹50,000 must generate an e-way bill. This bill ensures GST compliance and allows authorities to track tax evasion. 
 
E-way bill format 
The e-way bill includes an e-way bill number (EBN), bill generation date, and your GST number. It provides these details to the consignor, transporter, and consignee. The e-way bill consists of two parts: 
 
Part A of form GST EWB-01: 
This part includes GST details of the recipient, consignee’s GST details, invoice/challan number and date, delivery place’s pin code, reason for transportation, value of the goods, harmonized system of nomenclature (HSN) code, and transport document number (goods receipt number/railway receipt number/airway bill number/bill of lading number). 
 
Part B of form GST EWB-01: 
This part comprises the vehicle number. 
 
Generating the e-way bill 
The e-way bill can be generated on the GST electronic portal. However, note that this portal is separate from the GST common portal used for filing GST returns. Registered carriers must register separately on the GST electronic portal to generate e-way bills. Provide your business’s GST Identification Number (GSTIN) on the e-way GST portal and authenticate it with a one-time password received on your registered mobile number. After authentication, create a username and password for the e-way bill portal. Transporters without a GSTIN must enroll on the e-way bill portal and obtain a 15-digit Unique Transporter ID. 
 
Who generates the e-way bill? 
The party responsible for sending or receiving the shipment, regardless of whether they utilize their own vehicle, hired conveyance, railway, air, or water transportation, is required to generate the e-way bill. If transportation is outsourced, the transportation company generates the e-way bill, but only updates Part B. The registered person must provide the relevant details for Part A. Transporters can update Part A only with prior authorization from the consignee or consignor. In certain cases, the transporter may not need to furnish conveyance details in Part B if the distance is less than 50 kilometers and both the consignee and transporter are in the same state or union territory. 
 
E-way bill GST rules 
E-way bills are mandatory when the consignment value exceeds ₹50,000. Some additional rules to note are: 
 
– Multiple Consignments: If you ship multiple consignments simultaneously, generate e-way bills only for those exceeding ₹50,000. You can also voluntarily generate e-way bills for individual consignments below ₹50,000. The transporter must consolidate the e-way bills and indicate the serial numbers before transportation. 
 
– Multiple Vehicles: When consignments are transported using multiple vehicles, update the new vehicle details on the e-way bill through the GST portal. 
 
Non-compliance with e-way bill rules 
Failure to generate e-way bills or non-compliance with Rule 138 of the CGST Rules, 2017 may result in penalties as per Section 122 of the CGST Act, 2017. The consignment may also face detention or seizure per Section 129 of the CGST Act, 2017. 
 
E-way bill exemptions 
E-way bills are not required for consignments valued under ₹50,000, specific goods mentioned in Annexure to Rule 138(14) of the CGST Rules, 2017, and goods transported via non-motorized conveyance. Additionally, certain movements of goods within specified areas may also be exempt. 

IndusInd Bank Current Account: Tailored Banking Solutions for Your Transportation Business 
 
If you are a business owner looking for tailored banking solutions for your transportation business, IndusInd Bank Current Account is the answer. Benefit from a range of features designed to streamline your financial operations and support your business growth. IndusInd Bank offers customized account options, convenient digital banking services, competitive interest rates, and dedicated relationship managers to provide personalized assistance.

Enjoy seamless banking with IndusInd Bank and focus on taking your transportation business to new heights. Open an IndusInd Bank Current Account today and experience the difference. 

Open IndusInd Bank Current Account, NOW! 

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision.  IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. 

India’s entrepreneurial landscape has witnessed a remarkable surge in recent years, with young businesses emerging as powerful contributors to the nation’s economic growth. The government’s focus on promoting and supporting Micro, Small, and Medium Enterprises (MSME) has played a pivotal role in fostering this entrepreneurial spirit. One key aspect that affects the financial health of MSMEs is the Goods and Services Tax (GST) regime. In this blog post, we will delve into the world of GST and explore the applicable rates for MSME, highlighting the importance of effective financial management for their sustenance and growth. 
 
Understanding GST: 
 
GST is a comprehensive indirect tax levied on the supply of goods and services throughout India. Introduced on July 1, 2017, GST replaced multiple cascading taxes such as VAT, excise duty, and service tax, streamlining the taxation system and reducing complexities. Under the GST framework, businesses are required to register and comply with various rules and regulations. 
 
GST Rates for MSMEs: 
 
The GST rates applicable to MSME vary based on the nature of your business and the category to which it belongs. The GST Council, responsible for administering GST, has classified goods and services under various tax slabs, primarily 0%, 5%, 12%, 18%, and 28%. It is essential for young businesses to understand the applicable GST rates to ensure accurate compliance and avoid unnecessary tax burdens. 
 
Most goods and services fall under the 18% GST slab, including essentials like cement, steel, and household items. However, specific sectors receive more favorable rates to promote growth. For instance, if you are a small manufacturer with an annual turnover of up to INR 40 lakh, you can opt for the composition scheme which levies a lower rate of 1%. Similarly, restaurants and eateries enjoy a reduced GST rate of 5%. The government continually reviews and revises the GST rates to encourage the growth of MSMEs and simplify the tax framework. 
 
While understanding the GST rates for MSME is crucial, effective financial management goes beyond tax compliance. If you run a small business, then managing your finances diligently is crucial to ensure sustainable growth and profitability. IndusInd Bank Current Account can be a valuable asset in managing your finances and facilitating the growth of your small business. Here’s how: 

 1. Tailored Banking Solutions: IndusInd Bank offers current accounts specifically designed to cater to the unique financial needs of your business. These accounts come with a range of features and benefits that are relevant to small businesses, providing them with the necessary tools to manage their finances efficiently. 
 
2. Seamless Digital Banking: IndusInd Bank Current Accounts offer seamless digital banking capabilities, allowing you to access your account, make transactions, and manage your finances conveniently from anywhere, at any time. This empowers your business with the flexibility and convenience it needs in today’s fast-paced digital world. 
 
3. Multiple Banking Channels: With IndusInd Bank Current Account, you can enjoy access to a wide network of banking channels. These include online banking, mobile banking, phone banking, and a vast network of branches and ATMs, ensuring easy and convenient banking services for businesses across India. 
 
4. Value-Added Services: IndusInd Bank provides a range of value-added services that can benefit your business. These services may include cash management solutions, trade finance facilities, working capital finance, foreign exchange services, and more. Such offerings will help you in streamlining your operations, improve liquidity, and enhance your overall financial efficiency. 
 
5. Dedicated Relationship Manager: IndusInd Bank assigns a dedicated relationship manager to each MSME account holder. This personal touch ensures that your business receives customized support and expert guidance in managing your finances effectively.  

 That’s not all! You also enjoy transparent fee structure, nominal minimum balance requirement, instant account opening through Video KYC, and a range of banking services and features which make it a favored option for businesses seeking convenient and efficient banking solutions. 

Open IndusInd Bank Current Account, NOW! 

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision.  IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.  

For small businesses in India, understanding the intricacies of taxation is crucial. The Goods and Services Tax (GST) has been a significant reform in the country’s tax system, streamlining the taxation process and replacing multiple indirect taxes. However, the question arises: Do Micro, Small, and Medium Enterprises (MSME) have to pay GST? In this blog, we will delve into the details of GST applicability for MSME and shed light on the considerations that small businesses need to keep in mind. 

GST Applicability for MSMEs: 

The GST regime has brought most businesses under its purview, including MSMEs. As per the GST law, MSME are required to register for GST if their annual aggregate turnover exceeds the specified threshold limit. The current threshold limit for GST registration is Rs. 40 lakhs for most states in India, except for special category states where it is Rs. 20 lakhs. It is important to note that this threshold limit applies to the total annual turnover and not just the taxable turnover.  

Benefits of GST Registration for MSMEs: 

While GST registration comes with certain compliance requirements, it also brings several advantages for MSMEs: 

1. Legitimacy and Credibility: GST registration lends credibility to your business and enhances its perception among customers, suppliers, and financial institutions. 

2. Input Tax Credit (ITC): One of the major benefits of GST registration is the availability of input tax credit. MSMEs can claim credit for the GST paid on purchases and utilize it against the GST liability on sales. This reduces the overall tax burden and improves the cash flow. 

3. Business Expansion: GST registration is mandatory for businesses engaged in inter-state supplies or e-commerce activities. By registering for GST, MSMEs gain access to a wider market and can expand their operations beyond state boundaries. 

4. Compliance Benefits: GST compliance includes regular filing of returns and maintenance of proper books of accounts. This discipline ensures that MSMEs maintain a systematic approach to record-keeping and financial management, which is beneficial in the long run. 

Understanding GST Composition Scheme for MSMEs 

To ease the compliance burden for small businesses, the government has introduced the GST composition scheme. Under this scheme, MSMEs with an annual aggregate turnover of up to Rs. 1.5 crore can opt for a simpler tax structure with reduced compliance requirements. However, businesses availing of this scheme cannot claim input tax credit. 

IndusInd Bank Current Account: Empowering MSMEs for GST Compliance 

As a small business, managing your finances effectively is crucial for GST compliance. IndusInd Bank understands the unique needs of MSME and offers specialized current account solutions that help streamline your business operations, including GST-related transactions. 

Benefits of IndusInd Bank Current Account 

Tailored Banking for Your Business: IndusInd Bank offers industry-specific current accounts tailored to meet the unique needs of various sectors, including IT/ITes, agro, textile, telecom, shipping, import & export, and more. 
 
Flexible Cash Deposit Limits: IndusInd Bank understands the changing requirements of your business. Our current accounts offer dynamic transaction limits that can adapt to your flexible cash deposit needs today and in the future. 
 
Digital Payment Solutions: Embrace cashless transactions with ease. IndusInd Bank’s current account provides a range of digital payment solutions, including POS devices, QR codes, Soundbox, and Payment Gateway solutions. Accept payments from vendors, channel partners, customers, and more. 
 
User-Friendly Online Banking Portals: Bank conveniently with our user-friendly internet banking and mobile banking apps. Access your current account securely and seamlessly while on the go. 
 
Hassle-Free & Secure Doorstep Banking Services: Enjoy the convenience of premium doorstep banking services with IndusInd Bank’s current account. Benefit from services like cheque pickups, on-call cash pickups, and more, ensuring a hassle-free banking experience. 

That’s not all! You also enjoy transparent fee structure, nominal minimum balance requirement, instant account opening through Video KYC, and a range of banking services and features which make it a favored option for businesses seeking convenient and efficient banking solutions. 

Open IndusInd Bank Current Account, NOW! 

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision.  IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.