Skip to main content

Tax Breather for Ecomm Cos for 3 More Months

By
Tax Breather for Ecomm Cos for 3 More Months
Rollout of tax collection at source was deferred to July 1; implementation after systems fully ready
India proposes to defer the implementation of tax collection at source (TCS), a move that will give a breather to Amazon, Flipkart and other ecommerce service providers. “It has been decided to defer it for three months,” said a senior government official aware of the development. Online platforms have to collect the tax from those selling goods on their sites while making payments for goods sold.
The tax, designed as a measure to improve compliance by helping to track such transactions, was to come into effect on July 1. Ecommerce platforms, which have multiple sellers with small turnovers, have been wary of the provision, fearing an increase in the compliance burden. Their lobbying had already led to the tax being deferred by a year, just days before the goods and services tax (GST) rollout on July 1 last year.
Experts Favour Deferral
It was expected that the provisions would become effective from July 1, especially after some state governments issued directives to their GST departments asking them to gear up for its implementation. While the GST regime is regarded as having stabilised, it was felt the imposition of TCS could lead to a heavy burden on the GST Network (GSTN). The government is keen that systems are fully prepared to handle the added transactions before implementation.
The TDS/TCS provision mandates that notified entities have to deduct up to 1% state GST and 1% central GST on intrastate supplies of up to Rs. 2.5 lakh. TDS stands for tax deducted at source. In the case of interstate supplies of over Rs.2.5 lakh, TDS will be 2% integrated GST. These provisions are aimed at checking tax evasion as TDS/TCS leaves an audit trail.
For ecommerce platforms, this will mean tax deduction and deposit of 1% on every payment made to a vendor whenever goods are sold. For effective implementation of the provision, states and the Centre will also have to put in place administrative machinery to ensure the deductors are registered with them. Tax experts also favour deferral. “The provisions for tax collection at source require all vendors of electronic commerce operators (ECOs) to be registered and GSTN to be able to allow credit to the vendors for the GST collected by the ECO,” said Bipin Sapra, partner, EY. “These are intricate processes and need to be debated and tested before they can be implemented and hence due time should be given to all involved before they are brought in force.”
The Economic Times, 25th June 2018, New Delhi

Comments

Post a Comment

Popular posts from this blog

RBI deputy governor cautions fintech platform lenders on privacy concerns during loan recovery

By
  India's digital lending infrastructure has made the loan sanctioning system online. Yet, loan recovery still needs a “feet on the street” approach, Swaminathan J, deputy governor of the Reserve Bank of India, said at a media event on Tuesday, September 2, according to news agency ANI.According to the ANI report, the deputy governor flagged that fintech operators in the digital lending segment are giving out loans to customers with poor credit profiles and later using aggressive recovery tactics.“While loan sanctioning and disbursement have become increasingly digital, effective collection and recovery still require a 'feet on the street' and empathetic approach. Many fintech platforms operate on a business model that involves extending small-value loans to customers often with poor credit profiles,” Swaminathan J said.   Fintech platforms' business models The central bank deputy governor highlighted that many fintech platforms' business models involve providing sm
Post a Comment
Read more

Credit card spending growth declines on RBI gaze, stress build-up

By
  Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the rep
Post a Comment
Read more

India can't rely on wealthy to drive growth: Ex-RBI Dy Guv Viral Acharya

By
  India can’t rely on wealthy individuals to drive growth and expect the overall economy to improve, Viral Acharya, former deputy governor of the Reserve Bank of India (RBI) said on Monday.Acharya, who is the C V Starr Professor of Economics in the Department of Finance at New York University’s Stern School of Business (NYU-Stern), said after the Covid-19 pandemic, rural consumption and investments have weakened.We can’t be pumping our growth through the rich and expect that the economy as a whole will do better,” he said while speaking at an event organised by Elara Capital here.f there has to be a trickle-down, it should have actually happened by now,” Acharya said, adding that when the rich keep getting wealthier and wealthier, they have a savings problem.   “The bank account keeps getting bigger, hence they look for financial assets to invest in. India is closed, so our money can't go outside India that easily. So, it has to chase the limited financial assets in the country and
Post a Comment
Read more