The newly hyped goods and service tax has taken over various sectors and in the recent time, Flipkart, Amazon India, and Snapdeal collectively restricted tax collection at source (TCS), another system proposed under the model Goods and Services Tax (GST) law to tax merchants on Internet commercial centers. The proposition, if actualized, will square vital working capital for vendors and may make them move offline, the three online retailers said. Under the regulation, web based business firms should withhold the tax payable by the dealers on each exchange and store it with the administration for their sake. The arrangement is relied upon to produce results on 1 July alongside the national roll-out of GST.
Read Also: Timeline of GST Implementation in India, So Far!
Sachin Bansal, co-founder of Flipkart said that, “We are estimating that close to Rs400 crore per annum of capital will be locked in the system, which will not be accessible to sellers and straight away eat into their working capital, This will deter sellers from listing with us and working with us over a period of time.” At a question and answer session called by the Federation of Indian Chambers of Commerce and Industry, the three organizations said TCS is a “noteworthy dampener” for the business and may restrain development. Also, he said, the regulation is uncalled for as it just applies to dealers on online business commercial centers and does not cover offline retailers and organizations taking after the stock model.
Amit Agarwal, head of Amazon India mentioned that “We can achieve the objective through real-time data information sharing. We are digital businesses; it is very easy for us to provide information on a real-time basis. We don’t need human processes and cumbersome regulations to slow down the process.” Snapdeal’s prime supporter and chief executive officer Kunal Bahl said The regulation may likewise prompt to loss of business for 66% of the medium and little undertakings that offer on online business sites. Flipkart, Amazon India and Snapdeal, tax collection at source, Goods and Services Tax, Federation of Indian Chambers of Commerce & Industry, chief executive officer
Recommended: GST Impact on E-commerce Sector in India
Snapdeal’s co-founder and chief executive officer Kunal Bahl also said that “The proposal of tax collection at source, directed only at e-commerce marketplaces, in the draft model GST law, will hurt lakhs of small sellers by making online sales expensive and cumbersome for them.”
