The founders of India's e-commerce companies met at FICCI today, discussed a provision of the GST law
The founders and top officials of India's e-commerce companies like Amazon, Flipkart and Snapdeal have come together to seek changes in the draft model GST law. These companies are worried about rules related to TCS, or tax collection at source, a provision in the Goods and Services Tax.
Under TCS, the e-commerce companies would be responsible for collecting and remitting taxes on behalf of its sellers. Given there are thousands of sellers and merchants on each platform, this, the shopping portals say will be cumbersome and time consuming, and will also discourage sellers. The e-commerce companies believe that in its existing form, the law with the TCS clause has the potential to bring the e-commerce industry to a standstill.
Officials of the e-commerce companies say a thorough impact analysis of this tax provision on the online marketplaces had not been carried out diligently. Now, with the draft model GST law due to be finalised at the end of this month, the urgency is apparent.
Ironically, when the GST was passed by the Parliament, it was cheered by India's start up biggies. But now, they have joined hands with banks, sellers and small and medium enterprises asking for amendments in the model GST law, as in its present form the regulations will do more harm than good to the industry. But whether this pressure group succeeds, remains the big question.