Small online businesses soon to be exempted from GST registration

Small businesses selling goods on online platforms may soon be exempted from GST registration. Such a decision would boost small businesses through e-commerce, say central and state governments. A government official involved in the case said the move would bring about a structural change in the country's five-year-old indirect tax system. 

Currently, offline traders need GST registration only if their annual sales are more than Rs. 40 lakhs. Online merchants are required to register for GST, regardless of their annual sales. If the proposal is approved, both online and offline businesses will be equal in this regard.

A government source told Live Mint: "Industry and business representatives have approached the government to bring equality between online and offline vendors on the issue of GST registration. The council's legal committee will examine the proposal first, after which a decision will be made. " The move is significant in the sense that a large part of the Indian economy is informal. Being online can be very rewarding. There are over 63 lakh unorganized, non-agricultural MSMEs (micro, small and medium enterprises) in India. They contribute one third of the total economy of the country. Of these, more than 23 lakh are traders and about 20 lakh are producers.

According to MS Mani, partner at Deloitte India, "If the government takes this step, it will be of great benefit and encourage micro, small and medium enterprises. Online and offline businesses will be equal in this regard. You will be motivated to do business online. " Meanwhile, mandatory GST registration prevents many businesses from selling their products online.