MSMEs call for simplified GST processes for e-commerce growth

Hyderabad: Hyderabad’s retail ecosystem is evolving as MSMEs embrace hybrid models, integrating online and offline channels for a seamless customer experience. During the Hyderabad Retail Summit 2024, hosted by the Retailers Association of India (RAI), industry experts gathered to delve into pressing challenges and explore opportunities in the retail sector.

During a panel discussion titled, “GST Reforms to Boost Indian Retail,” retailers highlighted issues faced by MSMEs in the current GST regime. Retailers with multi-state presence emphasized the burdensome tax processes, citing instances of harassment and intimidation by state tax authorities. They also face challenges with the requirements for physical offices in each state, mandated by Principal Place of Business (PPoB) registration, introducing operational complexities and inefficiencies in working capital management. Also, updating GST certificates for additional premises is complicated by the lengthy waiting period for Additional Place of Business (APoB) registration.

During the discussions, stakeholders also shared recommendations highlighting how the introduction of digital invoicing by the government can simplify GST compliance for MSMEs, reducing paperwork and errors while enhancing efficiency. Also, adopting a single home state PPoB model in GST regulations will enhance operational flexibility for retailers. Addressing challenges in co-working spaces, stakeholders emphasized the need for clearer guidelines tailored to their unique nature to resolve classification and taxation issues. Collaboration between retailers and tax authorities was highlighted as crucial for addressing concerns and establishing mutually agreeable solutions. Additionally, cross-utilization of central tax was proposed to optimize tax liabilities, improve cash flow management, and streamline tax administration for a more seamless indirect tax regime.

Ganesh Pansare, CEO, Zeroharm Sciences Private Limited said, “Over the years, our business has undergone an extraordinary 20-fold expansion, greatly propelled by the support and expansive reach facilitated by e-commerce platforms like Amazon. Despite our remarkable growth, we’ve faced challenges, particularly in navigating GST regulations. The requirement of securing separate GST registrations for each state has emerged as a bottleneck hindering our scalability. ‘One nation, one GST’ policy, wherein a single PPoB suffices would alleviate the burden of multi-state registrations.”

Ankit Sarika Jain (CA), Founder, CAAJIB ECOM SERVICES said, “By leveraging e-commerce, sellers have achieved remarkable growth, with sales increasing by up to 40 to 50%. Yet, amidst this progress, challenges persist, especially in navigating the complexities of GST compliance. The necessity for multiple state registrations often perplexes sellers, exacerbated by cumbersome verification processes that mandate physical presence, contradicting the digital era we live in. Government’s role in alleviating these challenges is pivotal. Embracing digital invoicing and simplifying registration processes for e-commerce sellers can foster a conducive environment for growth. Government policies must align with the realities of the digital age, empowering MSMEs to harness the full potential of e-commerce.”

Kumar Rajagopalan, CEO, Retailers Association of India added, “The Retailers Association of India advocates for pragmatic GST reforms that align with the evolving retail landscape. Simplified registration processes, harmonised across states, and digital invoicing mechanisms are paramount to fostering a conducive environment for MSMEs to thrive in the digital age. Embracing these reforms will not only alleviate operational burdens but also drive inclusive growth in the retail sector. This will also increase certainty and ease of doing business and would ensure the government objective of ‘One Nation, One Tax, One Market’.”