*GST rule change for small businesses a game-changer for ONDC: Goyal | Business Standard News

Clipped from: https://www.business-standard.com/article/economy-policy/gst-rule-change-for-small-businesses-a-game-changer-for-ondc-goyal-122063001028_1.html

Goyal said another big advantage is for the small retailers who are very keen to engage with ecommerce

Commerce and Industry Minister Piyush Goyal

Commerce and Industry Minister Piyush Goyal

The Goods and Services Tax (GST) Council’s decision to waive mandatory registration for small businesses selling via e-commerce may prove to be a game changer for the success of the Open Network for Digital Commerce (ONDC), Trade Minister Piyush Goyal said on Thursday.

To bring parity between online and offline suppliers, the GST Council on Wednesday waived GST registration for those entities that have an annual turnover of up to Rs [40] 20 lakh and those not making any inter-state taxable supply. It also extended the GST composition scheme to online sellers, subject to the turnover threshold of Rs 1.5 crore. The changes in the law will come into force on January 1, 2023.

This is a major decision which will help the e-commerce ecosystem but more importantly help small businesses benefit from the growing e-commerce business in the country. One big advantage is also for the handicraft and handloom sector and the small textile sector,” Goyal said.

Goyal said another big advantage is for the small retailers who are very keen to engage with ecommerce. “Given the fact that the government of India is already actively working on the ONDC which would allow different platforms to talk to each other and to engage with each other and give consumers wider choice in purchasing of goods and services, this decision of the GST Council will be a game-changer for the success of ONDC and to bring the small retailers into the e-commerce ecosystem,” he added.

At present, sellers supplying through e-commerce operators (ECOs) must compulsorily be registered even if their aggregate annual turnover is below the threshold limit of Rs 40 lakh for goods and Rs 20 lakh for services.

Sellers who operate offline are allowed exemption from registration for supply of goods or services up to Rs 40 lakh or Rs 20 lakh, respectively. The threshold amounts are Rs 20 lakh and Rs 10 lakh in select states, including those in the north-east

Such businesses would now be required to declare their Permanent Account Numbers (PAN) and principal place of business. Second, for each PAN, such unregistered entities will be restricted to declare principal place of business in only one state. Such businesses will not be permitted to make interstate taxable supplies.

Goyal welcomed the Council’s decision to increase the GST rate on cut and polished diamonds from 0.25 per cent to 1.25 per cent to correct the duty inversion. “This is a very important decision which will again give a big boost to the sector. Both of these decisions are going to increase job and entrepreneurial opportunities in a big way,” Goyal said.

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