Open Network for Digital Commerce: GST relief to be a game-changer for ONDC, says Piyush Goyal

Commerce and industry minister Piyush Goyal said on Thursday that the Goods and Services Tax (GST) Council’s latest decision to exempt small businesses that have adopted e-commerce from compulsory registration will likely be a “game-changer” for the Open Network for Digital Commerce (ONDC) being promoted by his ministry.

Speaking at an event, Goyal said: “This is a major decision which will help the e-commerce ecosystem but more importantly, it will help small businesses benefit.” He added that the handicraft and handloom segments, along with many other small businesses in the textiles sector, stand to benefit from this move.

The Council on Wednesday waived GST registration for those businesses with an annual turnover of up to Rs 20 lakh and those that are resorting to the inter-state supply of goods and services. It also extended the GST composition scheme to online sellers, up to a turnover threshold of Rs 1.5 crore.

Currently, entities supplying through e-commerce operators are mandated to be registered even if their annual turnover is below the threshold limits (Rs 40 lakh for goods and `20 lakh for services for most states). However, under extant norms, the brick-and-mortar stores with similar turnovers are not required to register. So, the latest move will bring parity between online and offline players.

Goyal said another decision of the GST council to raise the GST on cut and polished diamonds from 0.25% to 1.5% (effective from July 18, 2022) is a good move, as it resolves the issue of ITC accumulation being faced by the sector on account of an inverted duty structure.

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