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Small businesses keen to sell on e-commerce but mandatory GST registration major deterrent: CAIT survey

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Ease of Doing Business for MSMEs: A survey released by traders’ body Confederation of All India Traders (CAIT) on Sunday said while e-commerce is a potential mode of business activity, mandatory GST registration for selling goods online is a major deterrent for small businesses. According to CAIT, which represents around 8 crore traders across about 40,000 trade associations, the online survey was conducted by its research arm CAIT Research Trade Development Society (CRTDS) and received 630 responses from 21 cities in 24 states. 

72 per cent respondents believed e-commerce is a significant channel for business but 66 per cent said GST registration is a big hurdle. GST registration has been mandatory for businesses looking to sell goods via e-commerce even as offline businesses with up to Rs 40 lakh annual turnover are exempted from GST.

“Prime Minister Narendra Modi has laid much weight on adoption and acceptance of digital technology by even the last mile person, (hence), this condition needs to be abolished in order to facilitate small traders take advantage of e-commerce in widening their business,” CAIT National President BC Bhartia and Secretary General Praveen Khandelwal said in a joint statement. 

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Further, 94 per cent respondents said e-commerce companies are killing their business by their monopolistic terms and flouting policies. 89 per cent opined that e-commerce policy and rules are necessary for a fair e-commerce business while 92 per cent said the current FDI policy in retail needs necessary amendments.  

CAIT, for years now, has been alleging business malpractices such as deep discounting, predatory pricing, preferential treatment to some sellers, circumvention of FDI laws, and more by e-commerce companies like Amazon, Flipkart, and others. 

“In comparison to offline retailers, the e-commerce scenario is completely free from all kinds of restrictions, giving a free way to any person to trade anything without caring about laws…No more leverage should be given to e-commerce companies. They should be made more transparent in their business dealings,” Bhartia and Khandelwal said.

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