All the Foreign companies who are operating in the E-commerce space and catering to the Indian consumers are directed to get themselves registered to the GST in all States. This step has been taken by the Government for the complete implementation of the TCS rule. The Government directed that all the e-commerce companies need to start collecting Tax at Source from 1st of October. To follow the TCS rules all the e-commerce companies need to get registered in all the states and the same follows for the Foreign players.
Thus, under these implementations companies like Amazon, Google, Apple and other foreign companies operating in the e-commerce space need to get themselves registered for goods and services tax (GST) in all the states within next 10-12 days. The industry in this context has requested for single registration procedure instead of multiple state registration for consideration on the compliance cost. But as of now, the Government has asked for State-wise registration.
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The provision for the Tax collection is such that the notified entities have to deduct 1% state GST tax and 1% central GST tax on all the intrastate supplies for Rs 2.5 lakh and for the interstate supplies over Rs, 2.5 lakh, the Tax deducted at source will be 2% integrated GST. The motive behind this move is to control Tax evasion as TDS/TCS will bring on a string of transactions. For the foreign e-commerce companies, if the seller is based outside the country, TCS will not be applicable.
The above decision has been notified after a meeting held between e-commerce players and the Central Board of Indirect Taxes and Customs on Tuesday. At this stage, there is a concession of 0.5 % for each State and Central GST, which has been provisioned to be 1%.
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The Tax experts advocated for the Centralized registration for foreign e-commerce players. National indirect taxes leader Pratik Jain at PwC said that the Foreign e-commerce companies could not be exempted from the GST registration and as per the current provisions they have to get themselves registered state-wise as to where they are playing as vendors. This would increase compliance significantly.
