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The latest news from the Indian e-com sector is that traditional rivals Amazon, Flipkart, and Snapdeal have united together to approach FICCI (Federation of Indian Chambers of Commerce and Industry) and present a joint front against the proposed GST.
Representatives from these companies had met with a panel of state finance ministers in August, 2016, when they asked for exemption from GST, stating that they were only ‘service providers’ giving a ‘platform’ to vendors. They also reported that their main source of revenue is advertisements (for which they already pay a service tax), and not taxes.
Panel chairman and West Bengal Finance Minister Amit Mitra had asked the representatives to put their demands in writing and submit a tax structure they would be happy with, noting that the issue of tax exemption for the e-commerce sector may turn into a “political hot potato” if the vendors were asked to pay taxes on their goods, but the intermediary was not.Amazon, Flipkart, and Snapdeal are expected to be supported by other companies such as Paytm, Zomato, and Grofers in their joint representation to FICCI.
Their presentation will touch upon the cons of ‘tax collection at source’, which can be a sore point between vendors and e-commerce sites. The representatives, along with FICCI members, will also meet officials from the Finance Ministry as well as the Niti Aayog in the hopes of finding common ground.
Do read our coverage of the impact of GST on e-com sector in detail here. Under the model GST law, there are certain provisions that have not gone down well with the e-com leaders in India. These are:
Click here to read more about threshold limits under GST.
To know more about Composition Scheme, Click here.
Some experts say that a unified GST might actually help the IT industry, as it will stop states from imposing arbitrary taxes on e-com sector. Case in point, the states of Uttarakhand, Bihar, and Assam, which imposed a 10% entry tax on online purchases back in May, 2016. While the jury debates, you can take the actions necessary for your business to be GST-compliant before time runs out. Some of the key points that should be kept in mind are: