New Delhi, Nov. 6 -- The Federation of Indian Micro and Small & Medium Enterprises (FISME) said changes to the GST refund formula could enable micro, small and medium enterprises (MSMEs) to recover a larger portion of their accumulated input tax credit (ITC), particularly manufacturers operating under an inverted duty structure.

The industry body also said businesses can accumulate substantial GST credit on raw materials, services and other inputs when the tax paid on purchases exceeds the tax collected on finished products. When output tax liability is insufficient to utilise the accumulated credit, funds remain blocked, limiting working capital available for wages, production and investment.

FISME highlighted that faster processing of...