Ease of Doing Business for MSMEs: One of the explanations for the low digital penetration of MSMEs are advanced Good and Services Tax (GST) compliance necessities wanted to make the transition from offline to on-line promoting platforms, mentioned MSME physique Federation of Indian Micro and Small & Medium Enterprises (FISME). “Only around 10 per cent of India’s small businesses sell online,” FISME added because it urged the federal government for efforts required to simplify the GST system, rationalise charges, and harmonise GST thresholds between offline and on-line sellers.
Currently, on-line companies are required to register beneath the GST system no matter their turnover at the same time as for offline sellers, it applies to companies with a turnover of over Rs 40 lakhs. This creates an unequal enjoying area between offline and on-line retail and has discouraged small companies from changing into part of the digital economic system, mentioned FISME in an announcement on Friday.
“Digitally-enabled MSMEs have the potential to grow twice as fast as their offline counterparts. There is a dire need to educate and encourage MSMEs to sell online, and spread awareness of the growth opportunities available through e-commerce platforms,” mentioned Anil Bhardwaj, Secretary General, FISME.
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Around 5 crore MSMEs are estimated to be unable to promote on-line on account of advanced and obligatory GST necessities whereas these working via on-line platforms are burdened with cumbersome and time-consuming periodical compliances like registration and submitting month-to-month returns, which additional dissuades them from registering beneath GSTN, the affiliation famous citing market intelligence and secondary analysis.
Earlier this month, the merchants’ physique Confederation of All India Traders (CAIT) had additionally launched a survey on GST compliance recording responses from 630 merchants. While 72 per cent respondents believed e-commerce is a major channel for enterprise, 66 per cent mentioned GST registration is a giant hurdle. Moreover, 94 per cent respondents mentioned e-commerce firms are killing their enterprise by their monopolistic phrases and flouting insurance policies whereas 89 per cent opined that e-commerce coverage and guidelines are essential for a good e-commerce enterprise.
Source: www.financialexpress.com”