Text of the Notification is Given Below:

Smt Nirmala Sitharaman
Ministry of Finance and Corporate Affairs,
Government of India,
Udyog Bhawan,
New Delhi — 110011

Respected Madam,

Sub: Protecting the interests of small traders.

I write to you to highlight the following issues which I believe to be the critical issues which impair the growth of small traders today:

1. Mandatory GST Registration for Online Sales: As per existing GST laws, any person who supplies goods through an e-commerce operator, is required to compulsorily register under GST, irrespective of the turnover of such persons. Accordingly, even where the turnover does not cross any threshold limit, such business would be required to register under GST and undertake all subsequent periodic compliances under GST. This requirement disincentivizes MSMEs and small traders from digitization. We believe that there are significant benefits to small and micro traders adopting the online channel which include.

• Access to markets: Selling online gives MSMEs access to markets and consumers which otherwise would not have been possible. Therefore, relaxing GST criteria, for small businesses with turnover below similar to offline players, will enable lakhs of MSMEs expand their addressable market.
• Access to capital: With more business happening online, a clear digital footprint of cash flows is created which also allows banks and NBFCs to give loans to MSMEs at competitive rates.
• Endurance to pandemic induced distress: Given the Covid pandemic and need for social distancing and safety concerns, a clear trend of preferring online buying is emerging among all types of customers. The need for enabling small businesses to sell online is ever more important today.
• Digitization and Government revenues: With the entire business being carried out through the banking channel, e-commerce has a digital first approach. This will give the Government’s Digital India a huge fillip. Further, as these small businesses tap newer markets and are able to grow organically leveraging the power of internet, Indian economy and Government tax revenues will get a major boost.

Our request is that the current GST rules should be harmonized for MSMEs/small traders wishing to adopt online commerce and leverage the power of internet with the offline ones. A threshold limit for GST registration should be introduced for MSMEs wishing to sell online (similar to the 40L threshold that is currently provided to offline retail stores).

2. Predatory Pricing and Deep Discounting Practices of Foreign Held E- Commerce companies in violation of FDI Policy: I call attention to Rs.1, Rs. 5, Rs. 9 stores that have sprung up all over foreign owned e commerce websites in recent times. Shopee (a Chinese owned e – commerce company) was the pioneer of these stores and now Flipkart (a Walmart company) has launched, with great fanfare, Rs. 5 stores on Shopsy (owned by Flipkart). These Rs. 5 stores are blatantly advertised and even have Bollywood actresses as brand ambassadors. How is a small trader expected to compete with such loss making Rs 1/Rs. 5 stores? How can there ever be a level playing field for small traders if foreign owned e-company commerce companies are allowed to get away with such blatant disregard for laws of this Country? Facie ka Salida The current laws clearly preclude such companies from deep discounting practices, however such companies claim that these discounts are actually funded by their suppliers and not by the platform. But which supplier, except for their own inventory held companies, would fund such loss making endeavors? These e commerce companies have scant regard for e-commerce policies and FDI regulations and are further emboldened by the fact that no stringent action has been taken against them by the requisite authorities.

Our request is that the interests of the small traders be protected and that your good offices launch the required investigation into such predatory pricing practices of such companies.

I trust that due regard will be given to the issues highlighted by me.

Thank you.

With regards Yours truly

Praveen Khandelwa
National Secretary General
Confederation of All India Traders

To Read official Representation Download PDF Given Below: