Merchant body seeks exemption from GST registration for small businesses selling online


The Confederation of All Indian Traders (CAIT) wrote to Finance Minister Nirmala Sitharaman on Sunday urging the government to amend sections 24 and 52 of the Central Goods and Services Tax (GST) Act at the next meeting. of the GST Council.

According to the letter consulted by Activity area, CAIT requests that the new rule of the mandatory condition of obtaining GST registration for e-commerce supplies be exempted in section 24. The central problem with the new rules is that sellers, regardless of their size and their revenue threshold, will be required to pay GST once they register under the same name when selling online through marketplaces or their own websites.

Previous Policy

Under the old GST policy, businesses with revenues of up to ₹40 lakh for supply of goods and up to ₹20 lakh for services did not have to pay additional GST regardless of whether they sell online or offline.

Instead of this mandatory registration under the GST, CAIT suggested that for authentication, Aadhaar number, bank account details or similar measures could be designated as essential qualification for onboarding on the portals of e-commerce. The industry body added that such a provision not only seriously affects the domestic market, but even exports suffer more.

Under Section 52, the traders body required that the levy of a 1% GST tax rate may be levied on the marketplace or e-commerce aggregator for all transactions conducted on their respective platform and in this way, the government will be able to track the transactions and also generate tax revenue from the e-commerce portals. Currently, the 1% withholding tax is levied directly on the seller, while the marketplace or aggregator acts as the ‘operator’.

Quoting the letter, ACPI National President BC Bhartia and General Secretary Praveen Khandelwal said, “Under the GST Act, a seller who wishes to sell goods in e-commerce must invariably obtain a GST number. . Any seller who does not have a GST number is not allowed to sell products on an e-commerce portal. This provision of the law not only prohibits hundreds of thousands of merchants from using the e-commerce platform to sell their products, but even prohibits a large number of small businesses of artisans, craftsmen, households and craft enterprises, women entrepreneurs who run businesses from their homes to supplement the income of families and people from other similar sections of society.

“On the one hand, in line with Prime Minister Modi’s vision, several ministries and state governments are eager to bring more and more sellers to the e-commerce platform, but the provision prohibiting sellers from having a GST number has become a major deterrent and roadblock to digital commerce adoption by hundreds of thousands of merchants nationwide,” they added.

Published on

March 13, 2022


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