Trade, import and export for MSMEs: Industry body for MSMEs Federation of Indian Micro and Small & Medium Enterprises (FISME) on Thursday suggested a dedicated policy framework for promoting e-commerce exports in the upcoming Foreign Trade Policy (FTP). The suggestion was part of the inputs shared by FISME to the government to support MSMEs selling goods online. The current FTP 2015-20 had to lapse on March 31 this year but was extended further till September 30. The government had earlier extended the policy in March 2020 amid the Covid spread.
“A large number of e-commerce sellers are micro units. However, for such enterprises, many of which operate from homes and without proper office, GST registration is mandatory to sell goods online while those operating offline with up to Rs 40 lakh annual turnover are exempted from GST. So, the new FTP should exempt e-commerce sellers as well to promote more businesses to go online before they start selling abroad,” Prashant Patel, President, FISME told TheSpuzz Online.
FISME also suggested several short to mid-term measures to address operational inefficiencies faced by MSMEs when exporting through the e-commerce channel. “This includes measures like simplifying returns in e-commerce exports, digitising the process of AD code registration (a 14-digit code provided by the bank and required at the port from where customs clear goods), automating the processes related to eBRC (electronic Bank Realisation Certificate for exporters by the bank as payment confirmation from the buyer for goods exported) and eFIRC (electronic Foreign Inward Remittance Certificate that acts as a proof of inward remittance to India) procurement and consolidation,” the body said.
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“GST refund for export items is applicable on invoices above Rs 25,000 but in e-commerce, the goods sold are largely around Rs 10,000 or less, MSMEs still have to pay 18 per cent GST. This 18 per cent is a very big amount for small businesses. Also, MSMEs have to pay import duty on e-commerce returns from foreign country. So, we have asked the government to make a separate policy for e-commerce exports in the upcoming FTP,” added Patel.
Other suggestions made by FISME were creating a single window clearance for e-commerce exports by leveraging existing systems in place like Indian Customs Electronic Gateway (ICEGATE) etc., and also benefitting from existing schemes and bodies like ‘Niryat Bandhu’ and ‘Export Promotion Councils’ to create more awareness about e-commerce exports among MSMEs. ICEGATE is the portal of Indian Customs of Central Board of Indirect Taxes and Customs (CBIC) that offers e-filing services to trade, cargo carriers and other trading partners electronically.