The Confederation of All India Traders (CAIT) on Sunday wrote to the Finance Minister Nirmala Sitharaman urging the government to amend Sections 24 and 52 of the Central Goods & Services Tax (GST) Act in the next GST Council meeting.

According to the letter accessed by BusinessLine, the CAIT is requesting that the new rule of mandatory condition of obtaining GST registration for e-commerce supplies should be exempted in section 24. The core issue in the new rules is that the sellers irrespective of their size and revenue threshold will be required to pay GST once they register under the same when selling online either through marketplaces or their own websites.

Previous policy

As per the older GST policy, businesses with revenue up to ₹40 lakh for supplying goods and up to ₹20 lakh for services did not have to pay additional GST, irrespective of whether they are selling online or offline.

Instead of this compulsory registration under GST, CAIT suggested that for authentication, the Aadhaar number, Bank Account details or similar measures can be designated as essential qualification for onboarding on e-commerce portals. The industry body added that such a provision is badly affects not only the domestic market but even exports are suffering to a greater extent.

Under section 52, the traders’ body has demanded that the collection of one percent GST tax rate may be levied on e-commerce marketplace or aggregator for all the transactions that happened on their respective platform and in this way, the government will be able to track the transactions and will also accrue tax revenue from e-commerce portals. As of now, the one per cent tax collected at source is being levied upon the seller directly while the marketplace or aggregator acts as an ‘operator.’

Quoting from the letter, CAIT’s National President B C Bhartia and Secretary General Praveen Khandelwal said, “Under GST Act a seller who wishes to sell products in e-Commerce is invariably required to obtain GST number. Any seller who does not have GST number is not allowed to sell products on any e-Commerce portal. This provision of the Act is barring not only lakhs of traders from using e-Commerce platform to sell their products but even prohibits large numbers of small businesses of artisans, craftsmen, household and cottage industry, women entrepreneurs who are conducting businesses from their home to supplement the income of the family and people of other similar sections of the society.”

“On one hand in pursuance of the vision of PM Modi, several ministries and State governments are eager to bring more and more sellers on e-commerce platform but the provision of not allowing sellers without having GST number has become a major deterrent and roadblock to embrace digital commerce by lakhs of traders of the country,” they added.

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