Budget 2026–27: FACSI Pushes for GST Simplification, Faster Refunds for MSEs

Graphic illustrating a demand for GST Relief and Simplified Returns by FACSI for micro and small units, featuring symbols of industries, a shop, coins, and upward growth arrows.

Ahead of the Union Budget 2026–27, the Federation of Associations of Cottage and Small Industries (FACSI) has urged the Government to extend targeted support to micro and small enterprises (MSEs) through tax relief, easier access to finance, and simplified regulatory compliance. The industry body believes such measures are critical to strengthening the contribution of small businesses to India’s economic growth.

In a pre-Budget memorandum addressed to Finance Minister Smt. Nirmala Sitharaman, FACSI President Mr. H.K. Guha stated that the recommendations were finalised after extensive consultations with entrepreneur associations and MSE groups across the country.

Among its key demands, FACSI has proposed the formation of a dedicated council for micro and small enterprises under the Ministry of MSME. It has also sought a higher exemption threshold under the GST regime and the introduction of a single, simplified GST return for small units to reduce compliance burdens.

Highlighting credit constraints faced by small businesses, the federation has called for statutory collateral-free lending of up to ₹1 crore for MSEs at a capped interest rate of 6–7 per cent. It has also suggested interest subvention during periods of financial stress and automatic renewal of working capital limits for units that comply with banking norms.

Raising concerns over liquidity, FACSI has demanded that GST refunds be issued within 15 days, along with statutory interest in cases of delay by the Government. The federation has also sought decriminalisation of procedural lapses related to GST returns, labour laws, and local regulations.

For export-oriented units, FACSI has proposed the creation of an Export Risk Equalisation Fund to compensate small exporters affected by sudden tariff hikes. It has further recommended increasing lending targets for MSEs by SIDBI and public sector banks.

The memorandum also called for a reduction in tender participation fees for MSEs on the GeM portal and stronger functioning of State Facilitation Councils to ensure faster resolution of delayed payment disputes. FACSI noted that some of these measures would require amendments to the MSMED Act, 2006.

Additionally, the federation emphasised the need for coordinated efforts with State governments to extend subsidies on renewable energy installations, electricity tariffs, and local levies. It also sought special incentives for units operating in industrial estates developed by State industrial development corporations.

Mr. Guha concluded that the proposed measures would act as a significant catalyst for sustainable growth of micro and small enterprises in India.

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