Industry Associations Urge Government to Address small etail's GST Compliance Issues

E-tailers in India are facing a major problem concerning GST compliance. This is causing a lot of confusion and financial hardship for small businesses, which are the backbone of the country's economy. The Government of India had introduced the GST (Goods and Services Tax) regime intending to make it easier for businesses to comply with tax laws. However, the implementation of the GST has been far from perfect.

One of the biggest problems facing e-tailers is that they must collect GST from their customers and then pay it to the government. This is a complicated process, and many small businesses cannot comply with the requirements.

The situation is so bad that many small businesses are now considering shutting down their operations as they are hit hard by the GST compliance. This would be a major blow to the economy, as small businesses are the engine of growth in India.

Several industry associations have written to the finance ministry, asking for a resolution to the compliance issues faced by small e-tailers under the goods and services tax (GST) regime.

They mentioned that the compliance burden on small e-tailers was "disproportionate" and impeded the sector's growth. The GST might have been a good move by the government, but its implementation is not favorable for small businesses.

The compliance issues faced by small e-tailers include reconciling GST invoices with their inventory drop in sales. This is a time-consuming and tedious process, which deters many small businesses from adopting the online market.

As per section 24(ix)of the CGST Act, 2017, every registered person shall furnish a return for every month electronically through the common portal, either directly or through a Facilitation Centre notified by the Commissioner, irrespective of the turnover.

To make matters worse, there is no provision for provisional registration under GST, which means that e-tailers have to get their final registration certificate before starting a business. This puts a lot of pressure on small businesses, which might not have the resources or manpower to get the GST registration done.

The mandatory GST registration requirement is also a problem for small e-tailers who sell products on online places like Amazon and Flipkart. These platforms take care of the GST registration process for their sellers, but the e-tailers are still required to file GST returns. This is a big compliance burden for small businesses, which are already struggling to cope with the GST regime.

The industry associations have requested the government for the simplification of the GST invoice format, and a reduction in the GST rates as most of the small businesses in India are run on low margins.

The associations have also asked to wave off late fees and penalties for delayed filings. The Alliance of Digital Federation India (ADIF) is one of the associations that have written to the finance ministry. It has requested the government to level the playing field for small businesses by exempting them from having to file GST returns.The ADIF has also asked for a separate set of GST rules for small businesses, which would be simpler and easier to comply with.

The government is yet to respond to the industry associations' requests. However, it is expected that the issues raised by the associations will be addressed in the upcoming GST Council meeting.