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

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...
Post a Comment
Read more

SFBs should be vigilant, proactive to mitigate risks: RBI deputy guv

By
  The Reserve Bank of India’s Deputy Governor Swaminathan J on Friday instructed the directors of small finance banks (SFBs) to be vigilant and proactive in identifying emerging risks in the sector.Speaking at a conference for directors on the boards of SFBs, Swaminathan highlighted the role of governance in guiding SFBs towards sustainable growth with stability. He also emphasised the importance of sustainable business models.Additionally, he highlighted the need for strengthening cybersecurity to protect the entities against digital threats and urged for a stronger focus on financial inclusion, customer service, and grievance redressal to ensure a broader reach of banking services.Executive Directors S C Murmu, Rohit Jain, and R L K Rao, along with other senior officials representing the Supervision, Regulation, and Enforcement Departments of the RBI, also participated in the conference.   -  Business Standard  30 th  September, 2024
Post a Comment
Read more

Brigade Hotel Ventures files draft papers with Sebi for Rs 900 crore IPO

By
  Brigade Hotel Ventures Ltd, owner and developer of hotels in South India, has filed draft papers with capital markets regulator Sebi to raise Rs 900 crore through an initial public offering (IPO).The proposed IPO is entirely a fresh issue of equity shares with no Offer-for-Sale (OFS) component, according to the draft red herring prospectus (DRHP).Proceeds from the issue to the tune of Rs 481 crore will go towards payment of debt, Rs 412 crore will be allocated to the company and Rs 69 crore to its material subsidiary, SRP Prosperita Hotel Ventures Ltd.Additionally, Rs 107.52 crore will be used to purchase an undivided share of land from the Promoter, BEL, and the remaining funds will support acquisitions, other strategic initiatives, and general corporate purposes.The company may raise up to Rs 180 crore through a Pre-IPO Placement.   If the placement is undertaken, the issue size will be reduced.Brigade Hotel Ventures Ltd is a wholly-owned subsidiary of Brigade Enterprises ...
Post a Comment
Read more