Ease of doing business for MSMEs
A survey released on Sunday by traders body Confederation of All Indian Traders (CAIT) said that while e-commerce is a potential mode of business, mandatory GST registration for the sale of goods in line is a major deterrent to small businesses. According to CAIT, which represents about 8 crore traders in 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% of respondents think e-commerce is an important channel for business, but 66% said GST registration is a major barrier. GST registration is mandatory for businesses seeking to sell goods via e-commerce, although offline businesses with an annual turnover of up to Rs 40 lakh are exempt from GST.
“Prime Minister Narendra Modi has placed a lot of importance on the adoption and acceptance of digital technology, even by the last mile person, (therefore) this condition must be abolished in order to allow small traders to leverage e-commerce to expand their business,” CAIT BC Bhartia National President and General Secretary Praveen Khandelwal said in a joint statement.
Subscribe now to the Financial Express SME newsletter: your weekly dose of news, views and updates from the world of micro, small and medium enterprises
Additionally, 94% of respondents said that e-commerce companies are killing their business by their monopolistic terms and flouted policies. 89% felt that the e-commerce policy and rules are necessary for a fair e-commerce business, while 92% said the current retail FDI policy needs necessary changes.
CAIT has alleged abusive business practices such as deep discounts, predatory pricing, preferential treatment for certain sellers, circumvention of FDI laws, etc. by e-commerce companies like Amazon, Flipkart and others.
“Compared to offline retailers, the e-commerce scenario is completely free from all kinds of restrictions, giving anyone a free way to trade anything without worrying about laws… No more leverage should be granted to e-commerce companies. They should be made more transparent in their business dealings,” Bhartia and Khandelwal said.