In a move that will benefit persons in the unorganised sector, the GST Council on Wednesday decided to waive mandatory registration for small entities selling their products online. The exemption will be for those having an annual turnover of up to Rs 20 lakh and those not making any inter-state taxable supply. The changes will be effective from January 1, 2023.
The two-day 47th meeting of the GST Council, headed by Finance Minister Nirmala Sitharaman, took place on Tuesday and Wednesday in Chandigarh and the final decision of the Council was announced on Wednesday.
The Council has provided the “waiver of requirement of mandatory registration under section 24(ix) of CGST Act for person supplying goods through ECOs, subject to certain conditions, such as – a) the aggregate turnover on all India basis does not exceed the turnover specified under sub-section (1) of Section 22 of the CGST Act and notifications issued thereunder; b) the person is not making any inter-state taxable supply”, according to an official statement.
Meesho founder & CEO Vidit Aatrey said this step brings much-needed parity between offline and online businesses. With an estimated five 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 added.
Providing a big relief to MSMEs, the Council has also extended the Rs 40-lakh threshold exemption for intra-state sales and the Rs 1.5-crore threshold under the composition scheme to online sellers. This is a game-changer for the MSME sector who would now have access to the e-commerce platform and this will enable more sellers to make the shift from online to offline.
The Council on Wednesday also allowed composition taxpayers to make intra-state supply through e-commerce operators (ECOs). “The details of the scheme will be worked out by the Law Committee of the Council. The scheme would be tentatively implemented with effect from January 1, 2023, subject to preparedness on the portal as well as by ECOs,” the statement added.
Composition dealers are those with a turnover of up to Rs 1.5 crore. They are required to pay GST at flat rates with input tax credit (ITC).
Abhishek Jain, partner (indirect tax) at KPMG in India, said, “In line with the government’s agenda to facilitate e-commerce in India, various compliance bottlenecks have been done away with for the e-commerce sector while allowing suppliers to e-commerce platforms to operate under 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.”
Read all the Latest News , Breaking News , watch Top Videos and Live TV here.