E-commerce under GST
E-commerce under GST
Nobody needs an introduction to what e-commerce is. It has become a part of our daily lives. Be it shopping, eating food, buying groceries, buying a vehicle, planning a trip or any other thing for that matter, we just turn to e-commerce. Such is its influence in today’s world. Will the scenario change under GST? Let’s see
The scene for E-commerce under GST doesn’t seem joyous presently because of the following reasons –
· No threshold for registration – Every person selling goods through e-commerce is compulsorily required to get registered under GST. No matter how much the turnover is, if you are a seller selling through e-commerce operator, get registered.
· Composition Scheme – While composition scheme is developed for the small and medium enterprises selling goods offline, no such benefit is available to online sellers. This increases procedural compliances and associated costs, which are burdensome for small sellers.
· Collection of TCS – Under GST, marketplace operators are required to collect tax at 2% from the sellers and deposit it to the government. This mechanism is being called ‘Tax Collected at Source’.
Eventually marketplace operator will file monthly return GSTR 8 giving details about the TCS collected. This will enable govt to check evasion of taxes.
These provisions under GST are clearly discriminatory in nature as
ofline sellers have threshold limit for registration (i.e. Rs 20L) , they have benefit under composition scheme and also they are not required to pay any tax while selling.
Thus these provisions are against the basic idea of making India a digital economy as they will certainly discourage people from selling online.
While big online sellers like Amazon and Flipkart are continuously trying to get relief for their sellers regarding the TCS clause, but it seems unlikely anything will happen as GST rollout date is barely 10 days away.
While many important issues are still unsolved it will be exciting to see how the events unfold given the environment of uncertainty.
But we hope the GST council comes up with permanent solutions soon to ensure smooth transition and working under GST.
