GST registration exemption for low-turnover sellers to boost e-commerce.

The GST Council has decided to make intra-state supplies made through e-commerce portals easier.

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The government’s decision to exempt e-commerce suppliers with less than a 40 lakh turnover will boost online sales of goods, industry participants said on Wednesday.
The GST Council has decided to make intra-state supplies made through e-commerce portals easier.
Such suppliers will no longer be required to obtain GST registration if their annual turnover is less than 40 lakh for goods and 20 lakh for services, respectively. This would take effect on January 1, 2023.
Vidit Aatrey, founder and CEO of Meesho, stated that the move brings much-needed parity between offline and online businesses. “With an estimated 5 crore MSMEs currently unable to sell online due to compulsory GST requirements, this game-changing measure can be an enabler for millions of small units including artisans, boutiques, and mom-and-pop stores. While MSMEs will benefit from a much larger addressable market, increased efficiencies, and easier access to capital, the move will spur the Indian economy and unlock massive tax revenues for state governments,” Aatrey said.
He stated that by 2022, approximately 60% of small businesses looking to go online on Meesho would have dropped out due to GST requirements. Flipkart’s chief corporate affairs officer, Rajneesh Kumar, stated that the decision will encourage and boost the country’s digital India agenda, as well as help these small businesses grow and prosper.
“This will reduce the compliance burden for small businesses especially, artisans, weavers, handicraft makers, artists, and homemakers to access markets through e-commerce and smoothen their on-boarding on these digital platforms,” Kumar said.
According to KPMG in India’s indirect tax partner Abhishek Jain, in line with the government’s agenda to facilitate e-commerce in India, various compliance bottlenecks for the e-commerce sector have been removed, while allowing suppliers to e-commerce platforms to operate under the composition scheme.
“This change will specifically help with the compliance burden of such suppliers and will invite more players in the market to route their business through e-commerce websites,” Jain said.

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