All sellers of goods are entitled to a threshold exemption of ₹40 lakh before they are liable to get themselves mandatorily registered under goods and services tax (GST). This is very helpful to small traders and businessmen as they are saved from the hassles and costs of compliances under the GST Act. However, if the same person intends to avail the benefit of sale through ecommerce operators, he must get himself registered under the GST Act. 

In short, if a business intends to sell goods online via marketplaces, it loses the benefit of threshold exemption and must pay GST from the first rupee onwards. Further, once the person is registered under GST, it is not only online sales but even offline sales will be liable to GST. So, even if the turnover of a business is less than ₹40 lakh, it cannot avail the benefit of threshold exemption. 

GoI has been announcing various schemes for MSMEs and encouraging digitisation of the economy. However, many of them having a turnover of less than ₹40 lakh are not able to avail benefits out of fear and apprehension of compliances. 

With the advent of ecommerce platforms, large businesses have expanded a lot in the market and areas where they were not serving. Covid has increased online sales greatly. The small-scale sector has been badly impacted due to lockdowns and restrictions. Further, their inability to operate on ecommerce platforms due to the condition of mandatory GST registration has worsened their situation. 

Even as one has to change with the times, due consideration has to be given to adapt. Today, even big businesses with a strong workforce are finding it difficult to comply with GST. Small businesses find it considerably harder. 

Registration is made mandatory because of the fear of non-compliance and tax evasion by the small-scale sector for online sales. There can be various precautions like obtaining KYC - PAN, Aadhaar number, etc - and submitting the details on a monthly or quarterly basis to the authorities. 

The system of tax collected at source while making payments to such businesses with a nominal rate will ensure proper reporting and control. Further, in case of sales through ecommerce transactions, the entire proceeds are transferred through normal banking channels. There is no way for the business to conceal the said turnover. 

It's high time there is no longer two separate threshold limits for online and offline sales. Also, small businesses should not be at a disadvantage of not increasing their turnover by online sales through ecommerce operators due to such conditions. One hopes this anomaly is removed soon and a level playing field is created for small-scale businesses that helps them to grow and enter the digital era with full speed. This will help self-employed individuals, housewives, etc, to start and expand their own businesses. Tuesday's budget presents a timely opportunity for the policymakers to enable the upward mobility of the growth trajectory of India's fledgling SME businesses.