Online MSMEs flag GST license challenges in Tamil Nadu

New Delhi, May 16, 2024 

Sellers and their consultants cite ‘significant challenges’ faced by online MSMEs in obtaining GST licenses in the State

Small and medium enterprises, including businesses operating online, on Thursday underlined the difficulties they have been facing with registering online to pay the Goods and Services Tax (GST).

In a webinar held by the Federation of Indian Small and Medium Enterprises (FISME) and the Tamil Chamber of Commerce, complaints were taken up on tax officials’ strictures around registration, specifically “significant challenges faced by online MSMEs and potential sellers in Tamil Nadu in obtaining GST licenses”.

Tamil Nadu’s 5 million MSMEs account for 8% of India’s overall registrations in the category. A joint communiqué by the trade groups cited the “obligation to justify Tamil Nadu as their primary state of registration” and other tax oversight moves as a burden.

“From the last 6–7 months … the department is not very aligned to the fact that a registration can be taken at a shared space,” said Ankit Jain, a consultant working with sellers in the State on GST issues. Tax officials frequently demanded a registrant’s presence at their place of registration with insufficient notice, Mr. Jain asserted.

“Simplifying registration processes, understanding and adapting to new business models, like shared spaces, and providing clear guidelines on procedural aspects are essential steps to enhance the ease of doing business,” observed Sangita Prakash, a Director with Deloitte. “Training for both taxpayers and officials can also improve compliance and understanding of GST regulations.”

“Clear and concise guidelines are essential, along with increased awareness among GST officers,” said FISME secretary general Anil Bhardwaj. “Meaningful dialogue between MSME bodies and the GST department is vital to finding common ground. It’s crucial to emphasise that the solution lies not in tax avoidance but in streamlining processes for easier compliance,” he added.

[The Hindu]