FISME, Tamil Nadu Chamber of Commerce flag concerns about GST registration.
FISME and the Tamil Nadu Chamber of Commerce highlight difficulties faced by online MSMEs in Tamil Nadu in obtaining GST licenses due to bureaucratic hurdles.
On Thursday, the Federation of Indian Micro and Small & Medium Enterprises (FISME) and the Tamil Nadu Chamber of Commerce highlighted the difficulties faced by online MSMEs and sellers in Tamil Nadu in securing licenses under the Goods and Services Tax (GST) regime.
The industry bodies stated that many MSMEs in the state encounter obstacles in obtaining GST registration. "Bureaucratic inefficiencies and stringent, often misinterpreted requirements from state authorities create challenges for sellers. Issues include excessive scrutiny of shared business spaces, the necessity for constant workstation presence, and the requirement to justify Tamil Nadu as their primary state of registration," the statement said.
Tamil Nadu hosts the third-largest number of MSMEs in the country, with 8 percent of the total, equating to five million enterprises. Online sellers expressed concerns about license cancellations due to requirements for physical presence, noting a significant gap between GST guidelines and their practical implementation by authorities, which complicates matters for legitimate sellers. "Despite our sincere efforts to obtain GST registration in Tamil Nadu, we’ve faced repeated rejections, hindering our ability to serve the region. The short notice and our inability for physical presence further exacerbated the challenge. It’s disheartening as India strives to promote MSMEs, yet barriers persist," said Manish Singla, CEO and Founder of Healthy18.
Anil Bhardwaj, Secretary General of FISME, noted that while GST was intended to bring transparency and simplicity, challenges remain, especially for new business models like e-commerce. "Clear and concise guidelines are essential, along with increased awareness among GST officers. Meaningful dialogue between MSME bodies and the GST department is vital to finding common ground. It’s crucial to emphasize that the solution lies not in tax avoidance but in streamlining processes for easier compliance. Simplifying the process will make compliance more manageable for businesses," he said.