22/07/2020 - Indian Economy

KEY POINTS

·         MSMEs continue to expect that the government will take measures to help them further grow and become a part of the digital economy in larger numbers.

·         However, the current tax regulations for online sellers are far from encouraging, and in fact these will disincentivise these sellers from selling through online channels.

·         There are over 6 crore MSMEs but total registration under GST including traders, retailers, service providers who have opted for non-registration of GST is around 1.25 crore. Therefore, a bulk of MSMEs having a turnover below Rs 40 lakh avoided registering under GST.

·         Union government this year introduced a 1% TDS levy on e-commerce transactions, on the gross amount of sale or service, expected to be implemented beginning October 1, 2020. These TDS and TCS rules create working capital concerns especially for MSMEs who are seeking wider market access through e-commerce marketplaces.

·         Online resellers in categories such as electronics, toys and books typically have margins in the range of 1-2% and maintain high inventory levels to support their business.

Measures needed

·         To begin with, the government can look at equally aligning the threshold for GST registration for online and offline sellers, allow composite taxpayers to at least make intra-state or city supplies on an e-commerce platform.

·         Consider withdrawing the onerous TCS and TDS requirements applicable to small sellers selling through online platforms. These can be replaced by PAN or GST-based simplified reporting obligations on e-commerce platforms to check against any GST or income tax non-compliance by online sellers.

Kindly review sir, thankyou

sir please review thank you

Please review. Thank you.

Pls Review Sir