NEW DELHI: Ecommerce players such as Amazon and Flipkart will be required not just to collect tax at source but also register in each state under the proposed goods and services tax (GST) regime as both the central and state laws provide for the levy.
The latest draft of the law has kept out service aggregators from its purview but seeks to cover certain notified services where the liability to pay GST shall be shifted from the actual service provider to the electronic commerce operator. According to the draft law, an ecommerce operator is required to tax collect at source (TCS) 1% of the net amount collected on behalf of the supplier of the good.
This would mean that for compliance, an ecommerce operator would be required to register in each state from where the supply is being made, including the supply of services, and deduct the tax under the respective GST laws in each state.
Not just this, the supplier would also be required to register under the GST laws in that state irrespective of any threshold limit.
The rate of tax of 1% shall be applicable under both the CGST and SGST law and therefore the operator m ..
The operator and the supplier are required to file prescribed returns in respect of supplies on a monthly basis, which would be matched, and in case of any mismatch that is not rectified by the supplier or the operator, the same would be added to the output tax liability of the supplier. Tax experts say this would substantially increase compliance costs.
“TCS provisions indicate that the ecommerce operators would need to take registration in each state where the vendors are located. This will significantly increase their compliance requirements,” said Pratik Jain, leaderindirect tax at PwC.
Jain said the government should instead consider allowing them to pay TCS in one state using the IGST mechanism.
The TCS provision has been brought in to allow authorities to track transactions carried out through electronic commerceThough aggregators have been kept out, some such as Uber should not expect relief with introduction of the concept of notified service wherein the tax liability could shift to the platform instead of the actual service provider. The new concept may well spare players such as Oyo Rooms where actual service providers may pay.
28TH NOVEMBER, 2016, THE ECONOMIC TIMES, NEW DELHI,
The latest draft of the law has kept out service aggregators from its purview but seeks to cover certain notified services where the liability to pay GST shall be shifted from the actual service provider to the electronic commerce operator. According to the draft law, an ecommerce operator is required to tax collect at source (TCS) 1% of the net amount collected on behalf of the supplier of the good.
This would mean that for compliance, an ecommerce operator would be required to register in each state from where the supply is being made, including the supply of services, and deduct the tax under the respective GST laws in each state.
Not just this, the supplier would also be required to register under the GST laws in that state irrespective of any threshold limit.
The rate of tax of 1% shall be applicable under both the CGST and SGST law and therefore the operator m ..
The operator and the supplier are required to file prescribed returns in respect of supplies on a monthly basis, which would be matched, and in case of any mismatch that is not rectified by the supplier or the operator, the same would be added to the output tax liability of the supplier. Tax experts say this would substantially increase compliance costs.
“TCS provisions indicate that the ecommerce operators would need to take registration in each state where the vendors are located. This will significantly increase their compliance requirements,” said Pratik Jain, leaderindirect tax at PwC.
Jain said the government should instead consider allowing them to pay TCS in one state using the IGST mechanism.
The TCS provision has been brought in to allow authorities to track transactions carried out through electronic commerceThough aggregators have been kept out, some such as Uber should not expect relief with introduction of the concept of notified service wherein the tax liability could shift to the platform instead of the actual service provider. The new concept may well spare players such as Oyo Rooms where actual service providers may pay.
28TH NOVEMBER, 2016, THE ECONOMIC TIMES, NEW DELHI,
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