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Seller associations not sharing e-com companies concerns over TCS

Updated on: Jul 13th, 2021


4 min read

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Last week saw top e-com companies in the country join hands to rally against the proposed TCS (tax collected at source) under GST. Amazon, Flipkart, and Snapdeal had taken the lead on this with head honchos Amit Agarwal, Kunal Bahl, and Sachin Bansal meeting FICCI and asking for a reprieve. It was expected that they would be supported by other online merchants.

However, sellers associations such as the All India Online Vendors Association (AIOVA) have now come out in support of the TCS, calling it a great way to remove ‘tax evasion’ amongst sellers and the ‘unnatural competition’ that it leads to.

Sellers not worried about capital blocking

Capital blocking due to TCS is a major concern for e-com platforms; one that is apparently not shared by sellers. A spokesperson for AIOVA stated that they do not see the TCS affecting liquidity as online platforms already hold seller money. The e-Commerce Sellers Association of India also echoed the same sentiment, reiterating the fact that a tax collected at source will force merchants without proper registration to move out of the system and create a level playing field for everyone.

A pro-TCS attitude does not mean sellers have no concerns about it at all. For instance, the online apparel market sees 15-20% returns on an average. Sellers in this category are worried that the process to reclaim TDS for such transactions might be cumbersome. The AIOVA has also decided to make a recommendation to the GST council to keep TCS at a threshold limit, especially if the current VAT liability for a seller is less than the proposed TCS amount.

How TCS will affect e-com sellers?

Here’s an in-depth post we did about understanding the impact of GST and the TCS clause on the e-com sector. While we wait for details on TCS limits to emerge, it would be good if you as an online seller took the first steps to becoming GST-ready. This way, when the change comes, you will not be caught off guard! So, what can you do to be prepared for GST? Glad you asked:

  1. Get your enrollment done on time. To read more about the enrollment process and its relevance, Click here.
  2. Plan your logistics and warehousing requirement carefully. To read our detailed guide on impact analysis on logistics and warehousing, Click here.
  3. Adopt such platforms, technologies which will enable your business to be GST-compliant. Click here to get all updates and access a pool of GST Calculators.

Want an expert to explain GST to you? Get one, right here!

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