Ease of Doing Business for MSMEs: Traders’ body Confederation of All India Traders (CAIT), which represents 8 crore traders across 40,000 trade associations across India, on Sunday urged Finance Minister Nirmala Sitharaman to amend Section 24 and Section 52 of the Goods and Services Tax act to ease online selling for small businesses. In a letter to the minister, CAIT requested an exemption for traders from GST registration for selling on e-commerce portals under Section 24 even as the government has mandated the registration for businesses with sales turnover above Rs 20 lakh in case of the supply of services and more than Rs 40 lakh in case of the supply of goods.

“The government is making all efforts for empowerment of small retailers in the country but since these small retailers have turnover less than Rs 40 lakhs and hence are not required to obtain GST registration, the threshold relief by the GST Council has become a nightmare for these retailers who wish to adopt digital commerce,” CAIT National President B C Bhartia and Secretary General Praveen Khandelwal said in a joint statement. 

CAIT also requested Nirmala Sitharaman to levy the one per cent GST tax on e-commerce marketplaces or aggregators for all transactions on their respective platforms. “This way, the government will be able to track the transactions and will also accrue tax revenue from e-commerce portals,” the associated added. The government in December 2020 had mandated businesses with a turnover of more than Rs 50 lakh to pay at least 1 per cent of their GST liability in cash. The move was intended to check the use of fake invoices to evade GST.

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E-commerce aggregators are responsible for tax collected at source (TCS) at 1 per cent on every transaction under Section 52 of the CGST Act and the payment to e-commerce sellers are made post the deduction of 1 per cent tax. On the other hand, as per Section 24 of the act, the e-commerce companies, which are required to collect TCS, are also mandated to get GST registration. 

“The mandatory GST registration is barring not only lakhs of traders across the country from using e-commerce to sell their products but even prohibiting large numbers of small businesses, artisans, craftsmen, household and cottage industries, women entrepreneurs who are conducting businesses from their home to supplement their family income,” Khandelwal said. He noted that for the purpose of authentication, the Aadhar number, bank account details or similar measures may be designated as essential qualifications for onboarding on e-commerce portals.