The government is negotiating with banks to give loans to small businesses at a lower interest rate of around 7.5-8 per cent, Minister of State for Finance & Corporate Affairs Anurag Singh Thakur said on Friday. He was interacting with the MCCI members on a webinar where he heard the concerns of the members about overcoming the COVID-19 induced crisis on the economy and human lives. Adequate and cheaper credit is the mainline demand of the industry in these difficult times. Regarding schemes of the government where it provides 100 per cent guarantee, Thakur expects that banks should not delay in disbursing funds.

He said that his “ministry is negotiating with the banks to give loans at lower interest rate of around 7.5 to 8 per cent of interest”, according to an MCCI release.

Speaking about the inverted duty structure in textiles, the minister said the issue is under consideration at both the Ministry of Finance and GST Council.

The textiles industry has complained that the absence of refund on input tax credit on the domestic sale of synthetic fabrics has blocked its working capital, while an inverted duty structure makes the rate on inputs higher than that on the output. At present, synthetic fibre is taxed at 18 per cent, yarn at 12 per cent and final output at 5 per cent, creating a tax structure where the tax rate on inputs is higher than that on final products. This inverted structure has made it easier to import synthetic textiles, (rather) than manufacture them domestically.

In response to a point that businessmen are receiving notices for audit and inspection during the pandemic, Thakur said that no one should be harassed with an audit or inspection during this period, unless the matter is urgent.