NEW DELHI: The government has deferred implementation of a provision that required ecommerce players such as Amazon and Flipkart to deduct tax on payments made to their vendors from July 1, under the new Goods and Service Tax regime.
In addition, small businesses that sell through these ecommerce platforms don’t have to register themselves immediately, the government said.
Ecommerce players had feared losing business as a large number of small suppliers were yet to register their operations as required under GST guidelines.
These firms had raised this issue in a representation to the government and were quick to welcome the development.
Ecommerce companies will not be required to collect 1% TCS (tax collected at source) while making payment to their suppliers for goods sourced under GST, the finance ministry said in a statement issued on Monday.
As per Central GST (CGST) and State GST (SGST) Act, notified entities are required to collect TDS (tax deducted at source) or TCS at 1% on payments in excess of .`2.5 lakh to suppliers of goods or services. This provision has now been kept in abeyance.
“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,” the finance ministry said.
A new date for its implementation will be announced later.
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 ecommerce portals. “This step has been taken to provide more time for persons liable to deduct tax at source/ecommerce 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 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.
Source : http://economictimes.indiatimes.com/news/economy/policy/gst-relief-for-amazon-and-flipkart-as-government-defers-implementation-of-a-provision/articleshow/59327936.cms