The government has given relief to e-commerce majors such as Amazon, Flipkart, and Snapdeal, putting on hold a provision to deduct a one percent tax collected at source (TCS).
It also gave more time to small entities selling on an e-commerce marketplace to register with the Goods and Services Tax (GST) Network.
E-commerce entities welcomed the decision, saying it would ease the cash flow position of vendors but added that they wanted the abolition of the one per cent TCS.
E-commerce platforms had feared a loss of business after it was revealed that the new bill would require small retailers to register themselves with the government. After the delay, e-commerce platforms are still required to register themselves but their vendors can register later. The government will issue notification regarding a new date of implementations soon, as opposed to from July 1.
As per central and state GST, e-commerce entities were required to collect TDS or TCS for all the goods which are serviced under GST.
The finance ministry of India said that- “Based on the feedback received from trade and industry, the government has decided to postpone the provision relating to TDS (Section 51) and TCS (Section 52) of the CGST/State GST Act 2017, with the objective of ensuring a smooth rollout of GST”.
Small businesses with a turnover of less than Rs 20 lakh don’t have to register themselves under GST for selling goods or services through e-commerce portals. “This step has been taken to provide more time for persons liable to deduct tax at source/e-commerce companies and their suppliers to prepare for the historic tax reform,” the statement added.
“We welcome the move as it gives breathing space to marketplaces but would like to see the TCS implemented as soon as possible as it gives level playing field,” said the All India Online Vendors’ Association (AIOVA) spokesperson.
The GST Network portal has started accepting registration of TDS, TCS deductors and e-commerce operators only from June 25. Given the huge rush, it is unlikely all registrations would be done before July 1rollout.
The biggest indirect tax reform since Independence, GST will subsume a host of levies, including excise, service tax, and VAT. It will create a uniform market for seamless transfer of goods and services.
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