India's FISME seeks GST compliance parity between offline, e-com biz

02 May '23

2 min read

Pic: Shutterstock

Insights

The Federation of Indian Micro and Small and Medium Enterprises has urged the government for parity in goods and services compliance between offline businesses and e-commerce sellers to encourage more MSMEs to go online.
It also suggested exemption from import duties on returns, inventory and order management support for new firms and subsidies for MSMEs.

The Federation of Indian Micro and Small and Medium Enterprises (FISME) recently urged the ministry of micro, small and medium enterprises (MSMEs) for parity in goods and services (GST) compliance between offline businesses and e-commerce sellers to encourage more MSMEs to go online.

One of the reasons for low digital penetration among small businesses is the complex GST compliance requirements needed to make the transition from offline to online selling platforms, FISME claimed in its representation.

FISME suggested facilities like exemption from import duties on returns, inventory and order management support for new businesses, simpler funding options and subsidies for MSMEs, and efforts to drive awareness around digital marketing for new MSMEs.

It also demanded an enabling e-commerce policy and the exemption of additional compliance obligations for online sellers.

The recommendations were made in consultation with over 40 delegates representing MSMEs, think tanks, payment service providers, e-commerce and last-mile delivery platforms, and industry organisations such as Meesho, Zomato, PayU, Amazon, BlinkIt and Shiprocket.

While it is mandatory for online businesses now to register under GST regardless of turnover, offline sellers with a turnover of more than ₹40 lakh have to apply for GST. And this creates an unequal playing field between offline and online retail, the federation claimed.

“There is an urgent need to educate MSMEs on the benefits of online selling, such as access to a wider audience and nuanced market intelligence. We need to establish a level-playing field between online and offline businesses and limit the additional compliance burden imposed on online sellers,” FISME secretary general Anil Bhardwaj said.

“A favourable policy particularly for women entrepreneurs to increase their participation, a uniform e-commerce logistics policy that makes it easy for new MSMEs to reduce their transactional cost, driving awareness on the onboarding process and making the process easier, are some ways that will help small sellers,” said FISME in a statement.

An information portal that serves as a one-stop-destination for regulatory policies will also help educate MSMEs, it added.

Fibre2Fashion News Desk (DS)

More E-commerce News - India...