The Federation of Indian Micro and Small & Medium Enterprises (FISME) and Tamil Nadu Chamber of Commerce recently highlighted difficulties faced by online micro, small and medium enterprises (MSMEs) in Tamil Nadu in obtaining necessary licenses under the Goods and Services Tax (GST) regime.
In a joint statement, the industry bodies said that many MSMEs in the state have been facing hurdles in securing GST registration due to bureaucratic inefficiencies and stringent application requirements set by authorities. These include excessive scrutiny of shared workspaces, an expectation of constant physical presence, and the need to strongly justify registering Tamil Nadu as the primary state.
Tamil Nadu is home to one of the largest MSME populations in the country, accounting for 8% of the national tally with over 5 million such enterprises. Online sellers mentioned issues with license cancellations where physical presence standards could not be met, adding that gaps sometimes exist between stated GST guidelines and their implementation in reality.
One startup CEO said they had made sincere efforts to register in Tamil Nadu but faced repeated rejections, hindering their ability to serve customers in the region. Notices with short deadlines and the inability to meet in-person further exacerbated challenges.
FISME’s Secretary General noted while GST was meant to bring more transparency and simplicity, problems persist especially for emerging e-commerce models. Clearer instructions coupled with increased awareness among officials are needed. Meaningful dialogue between industry groups and tax authorities also important to find workable solutions. The focus should be facilitating easier compliance rather than tax avoidance. Simplifying registration processes would make adhering to rules more manageable for organizations.
