Push For ONDC – Composition taxpayers would be allowed to make intrastate deliveries through electronic commerce channels, subject to certain conditions. The announcements will be tentatively effective from January 1, 2023. Details of the scheme will be worked out by the GST Council’s law committee.
GST Council Waives Registration Requirement
Clearing the decks to facilitate the inclusion of small players on e commerce platforms, the Goods and Services Tax GST Council on Wednesday June 29 waived the mandatory registration requirement for businesses with an annual turnover of up to INR 40 Lakh and INR 20 Lakh for goods. and services, respectively.
Exemption from the mandatory registration requirement under section 24 ix of the CGST Law for the person who supplies goods through ECO, subject to certain conditions, such as, firstly, that the aggregate turnover in all India does not exceed the turnover specified in subsection 1 of section 22 of the CGST Act and the notices issued thereunder and, second, the person is not making any interstate taxable deliveries, said a statement from the Treasury.
Currently, sellers supplying through e-commerce operators are required to register even if their total annual turnover is below the INR 40 Lakhs or INR 20 Lakhs limit.
The notice also said that compound taxpayers could make intrastate supplies through electronic commerce channels, subject to certain conditions. It is pertinent to note that compound taxpayers companies with a turnover of up to INR 1.5 Cr can only make local sales, unlike normal taxpayers who can make interstate and intrastate sales.
The announcements will tentatively take effect from January 1, 2023. Details of the scheme will be worked out by the council law committee, according to the statement.
The move will benefit about 1.2 lakh small traders, an official told PTI. Such a move will ensure parity between online and offline providers, and will give a huge boost to the ease of doing business. This is especially true for micro and small businesses, artisans, and women entrepreneurs who work from home, added the official.
Push For ONDC
The move comes at a time when the government has set its sights on getting the Open Network for Digital Commerce ONDC up and running. Many had pointed out that the GST registration requirement for e commerce providers could be an impediment to the inclusion of small businesses in the ONDC.
With this move, the government has removed a hurdle, making it easier for platforms to onboard sellers without mandatory GST registration.
ONDC aims to provide a level playing field for small businesses in the e-commerce space and curb the dominance of deep-pocketed players like Flipkart and Amazon.
Earlier this month, Union Minister Piyush Goyal, while reviewing the pilot launch of the ONDC, had called for strategies for the inclusion of non-digital traders and artisans to be prioritized on the platform.
A parliamentary panel also noted that mandatory GST registration placed an undue burden on small sellers operating on e commerce platforms. He also called for the extension of the exemption available for offline businesses to online gamers.
The move also aims to increase compliance and plug revenue leaks. It would also allow micro, small and medium sized enterprises MSME to list on e-commerce platforms and create alternative streams of income.
A number of other decisions were also made on the second day of the GST Council meeting on Wednesday, including the postponement of the proposal to impose 28% GST on casinos, online gaming and the lottery.