Red Tape in GST Registration: A Hurdle for Online MSME Traders

Introduction

Challenges Faced by Online MSME Traders

In recent times, online Micro, Small, and Medium Enterprises (MSMEs) have been facing considerable obstacles in obtaining Goods and Services Tax (GST) registration.

The Forum for Internet Retailers, Sellers & Traders (FIRST) India

Advocating for MSMEs

The Forum for Internet Retailers, Sellers & Traders (FIRST) India, a subdivision of the India Small and Medium Enterprises (SME) Forum, has been actively addressing the challenges faced by online MSMEs in various aspects of business operations.

Issues Highlighted by FIRST

Obstacles in GST Registration

In a recent representation to the principal chief commissioner of Central GST and Central Excise of Tamil Nadu and Puducherry, FIRST India highlighted the issues encountered by online MSMEs seeking GST registration in Tamil Nadu.

Cumbersome Processes and Incorrect Interpretations

Impediments to Business Operations

The GST registration process, initially designed to streamline business operations, has now become burdensome due to incorrect interpretations and stringent requirements imposed by registration authorities in Tamil Nadu.

Absurd Requests and Scrutiny

Unnecessary Hurdles

Sellers applying for GST registration are facing unwarranted scrutiny and unnecessary requests for clarification on trivial matters. These include queries regarding the use of shared spaces for business operations, mandatory presence at the desk during working hours, and justifications for choosing Tamil Nadu as the state of registration despite having a presence in other states.

Impact on Business Opportunities

Hindrance to Market Entry

The stringent enforcement of arbitrary rules and lack of understanding of GST guidelines by authorities are not only deterring sellers from entering the Tamil Nadu market but also resulting in revenue loss for the state.