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Industry Wants Govt to fix Small Etail’s GST Compliance Problem

Industry associations India Tech.org, ADIF and Nasscom have urged the government to reduce the GST compliance burden on small online sellers. They have said that many micros, small and medium enterprises (MSMEs) hesitate to transition to online marketplace due to cumbersome tax compliances under the goods and Services Tax (GST) law. This, they have argued, discourages MSMEs from exploring online marketplaces and slow India’s vision of a digital powered economy. The compliance rules could inhibit sellers whose current incomes are well below the GST limits, they have said. Section 24(ix) of the CGST Act, 2017, states that “any person who supplies goods through an ecommerce operator, is required to compulsorily register under GST, irrespective of the turnover of such persons,” hence, even where the turnover dose not cross the prescribed threshold for GST law, these businesses are required to register for the tax and comply periodically, they have sad. “The MSME ministry, in the interest of MSMEs and small businesses, should recommend that the exemption limit for small businesses should apply irrespective of whet her the sale happens in state or outside,” India tech.org said in a letter to state finance ministers, GST Council Secretariat, ministry of micro, small and Medium Enterprises and the finance ministry on Monday.

It said this requirement should be removed in case of online selling, which would encompass inter-state selling It said “an alternative authentication process” should be put in place involving PAN and bank accounts. The mandatory GST registration for online sale even when the turnover is under ₹40 lakh could be because the exemption does not apply for trade within the state, India Tech said. Earlier, the Alliance of Digital Indi government to level the playing field bittern online and offline businesses to allow startup to survive especially in the post-pandemic economy. The body also expressed concern over the increased cost of services offered online and dampening of digital growth owing to these provisions in addition to the adverse mission in addition to the adverse impact it could have on startups and small businesses.

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