Mandatory GST Registration Hinders Small Businesses to Go Online

The new mandatory GST registration for online sellers is a hindrance to small businesses who are trying to go online. This will increase the costs and paperwork for these businesses, making it harder for them to compete with larger businesses. A survey was conducted by the research arm of CAIT Research Trade Development Society (CRTDS) and got responses from 21 cities in 24 states. The report said that "66 percent believed that the new GST rules will make it difficult for small businesses to sell online as they would have to now comply with multiple tax laws and file multiple returns."

However, the GST is mandatory for any business with a turnover of more than Rs 40 lakh, also the GST impacts etailers with more costs.  The main aim of GST is to create a unified national market by removing the barriers of entry for small businesses but the new rules may have the opposite effect. The report suggested that the government should create an easy and simple GST registration process for small businesses so that they can go online without any hassle.

The report also said that the government should provide some kind of support to small businesses so that they can comply with the new GST rules. Not only the small businesses, The it has created many confusions in the major e-commerce domains. Amazon discontinued Platinum Seller Program with the lack of clarity on market fees and margins. The government should also create a level playing field for small businesses by exempting them from certain taxes and duties. The government should also create a special fund for small businesses so that they can get access to credit at lower interest rates.

94 percent of the respondents mentioned that monopolistic terms laid by e-commerce platforms are the biggest barrier to their growth. The government should take measures to ensure that e-commerce platforms do not abuse their market power and create a level playing field for all businesses.CAIT, for years, has been alleging the anomalies in the business model of e-commerce firms in India and has been demanding changes to it.

The survey also found that the awareness of GST was low; this is a major concern as small businesses are the backbone for the Indian economy, accounting for 45 percent of the country's GDP. The government needs to do more to educate and support small businesses so that they can comply with the new GST rules.