The provisions are never ending and now the government has directed that the small vendors listed on the e-commerce giants like Flipkart and amazon will have to pay a GST in advance under the goods and services tax scheme when they get their payments even if they fall into the exempted series.
The reason behind this has emerged that to impose 1 per cent on these sites is to hold all transactions in the e-commerce area and not allowing anything to go out of the track. All vendors registered on these e-commerce websites will be liable to pay 1 percent of the tax collected at source.
All e-commerce companies are liable by the law to deduct tax from registered vendors whenever a sale occurs, irrespective of whether the seller is liable to pay tax or not and they will further withhold 1 percent whenever the payment is made to the seller.
Read Also: GST Slab Rates in India 2017 Finalized by the GST Council
An official mentioned that, “If anyone does not have a liability, they can claim a refund.” As the provision also includes that a business entity having a turnover below than 20 lakh are exempted from the GST ambit and it will require them to claim their refund from the tax department subsequently.
A spokesperson for the All India Online Vendors’ Association (AIOVA), with having around 2 thousand sellers under mentioned in a statement that, “As very few sellers fall within the Rs 20 lakh bracket this is not a big worry for us. We have also welcomed the tax rate. The areas which need clarification are what happens in the case of a return. Also, the stock transfer is a matter of concern for us as.”
Bipin Sapra, partner, EY said that “In transactions through an e-commerce operator, the compliance shall increase in the GST regime, more so for small service providers, vendors will have to get registered to claim refunds of the tax collected at source by the e-commerce operator.”
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