NASSCOM welcomes the decision of the GST council on the In-principal approval for relaxation in the provisions for suppliers making supplies through E-Commerce Operators (ECOs). The composition taxpayers would now be allowed to make intra-State supply through e-commerce operators subject to certain conditions. This will give additional avenues of growth to small sellers and provide them the opportunity to sell across India without having a physical Principal Place of Business (PPoB) in each state, thus increasing efficiency and bringing ease of doing business in India. It will also encourage such sellers to adopt GST compliances effectively as composition dealers are exempted from the maintenance of elaborate accounts and records. Along with this, waiving off the mandatory registration requirement for person supplying goods through online marketplaces as a part of composition scheme is a positive development for small sellers selling online, enabling small sellers to have a level playing field (vis-à-vis offline sellers) and transform themselves into organized players.
There has been an increased focus of the government on use of Artificial Intelligence/ Machine Learning based mechanism to streamline compliances and to enable ease of doing business. In line with this, another big move is GoM’s recommendation on IT reforms. Putting in place the AI/ML based mechanism to verify the antecedents of the registration applicants, and improved risk-based monitoring of their behavior post-registration. will help the government in identifying non-compliant taxpayers at an initial stage and will help in minimising risk to the exchequer. It would help identify non-compliant taxpayers at an early stage, so that appropriate action could be taken to minimize the risk of the exchequer.
We welcome the change in formula for calculation of refund under rule 89(5) to consider utilization of Input Tax Credit on account of inputs and input services. This would enable payment of output tax on inverted rated supplies in the same ratio in which ITC has been availed on inputs and input services, during the said tax period. The announcement to allow refund of inverted duty structure on inputs services will ease working capital requirements of such taxpayers, which was otherwise getting accumulated without any recourse to refund or utilization of the credits. In addition, the continuation of ongoing exemption of IGST on the import of goods under AA/EPCG/EOU scheme is also a welcome move, that will help strengthen global trade. It is an important announcement for MSMEs engaged in export of services and will provide relief to service export units as these companies have huge investments by way of capital expenditure.
