The TCS and TDS provisions, which were kept in abeyance since the rollout of GST on July 1 in 2015, will include to the compliance burden of ecommerce business.
Amazon India and Flipkart may be preparing for their huge joyful season sales, but the federal government seems to have put a spanner in the works. The Central Board of Indirect Taxes and Customizeds on Thursday alerted October 1 as the date for executing the tax deducted at source (TDS) and tax gathered at source (TCS) provisions under GST law.Ecommerce business will now be needed to collect as much as 1 percent TCS while making any payment to sellers under the brand-new Item and Provider Tax (GST) program. States too can levy up to 1 per cent TCS under the State GST (SGST) law.The Big Billion Day sale, which is Flipkart’s yearly shopping festival, is generally held in October. Amazon India holds its flagship sale, Great Indian Celebration, during Diwali. After that, the ecommerce industry gets into the festive Christmas and New Year mood.The GST, which
subsumed various regional and state taxes, was implemented from July 1, 2017. To make it easier for small companies and traders to tide over preliminary teething issues, the TDS/TCS arrangements of GST laws were kept the backburner till June 30, 2018, and after that further deferred till September 30, 2018.
Anita Rastogi, Partner, GST and Indirect Tax, PwC, stated, “We were expecting that this announcement would get held off till the next monetary year. The ecommerce sector is dealing with numerous obstacles. With this provision in force, ecommerce business have to collect tax at source for sales on the platform prior to remitting the payment to suppliers. But the catch is whether the ecommerce business has to register in all 28 states where its vendors lie. This is an interpretation concern and it will be excellent if the government can rapidly clarify this.”
She included: “Let me discuss with an example. Let’s state I am an ecommerce operator and have actually taken registration in Bengaluru and Delhi. On my platform, I have sellers from Bihar or North East who are qualified to sell. I require to gather tax at the source prior to it goes to suppliers. If I do that, suppliers need to take the advantage of the tax deduction I have made. No, unless the commerce operator is registered where the sellers are based, the sellers will not be able to take the credit. We hope this concern is dealt with on an urgent basis. The suggestion is that the ecommerce companies need to not be needed to sign up at numerous places just to satisfy the condition of gathering tax at source and transferring with government. Otherwise, compliance procedures for ecommerce companies will increase multifold. We also have to keep in mind that only two weeks are left for companies to comply with this.”