E-tailers (a retailer selling goods via electronic transactions on the Internet), are unsure about the impact of the New GST tax collection system especially the TCS, on their business and thus have urged the Government to give some time for getting slowly into the process without hampering their profitability. Government is also likely to give levy of time to these businessmen by bringing some relaxation in the date of the implementation of TCS, which was the 1st of October. The news is also there as there would be some relaxation in the Rules related to the GST taxation.
Moneycontrol which is India’s leading financial information source has been informed by the sources that Government seems to be in favor of extending the First month’s return filing date in order to ease up the Tax return filing for the e-tailers. As we know, the e-commerce companies are directed to collect one percent as Tax collected at source for each online transaction.
According to the sources, retailers have demanded the New rule of Tax deduction to be brought to practice after three months. But, denying the request, the government has accepted for the extension of the first month’s return filing date to make it easy for the online businesses to get into the process. As per the instructions, Companies are supposed to file returns by the Month’s 10th day. Thus, the e-tailers are required to file their first set of returns (GSTR 8) by 10 November.
According to a senior government official from Moneycontrol, the decision on the extension of dates of return filing could be taken looking at the data which comes from the industry. Also, genuine reasons would be considered during extensions of the dates.
To tackle with other major issues like the place of registration and Rules for Foreign companies etc, Government is all set to come up with FAQ’s (frequently asked question) in order to clarify the rules.
The Big e-commerce companies like Flipkart, Snapdeal and Paytm have met the Finance ministry officials last week to discuss the rules related to TCS and asked for more clarity.
Certain issues related to the new tax applicability rules discussed below:
- The e-commerce companies have suggested for a single registration system that would prevent the companies from getting registered to different states where they have their businesses. The Government is supposed to accept the proposal.
- The Tax applicability on the goods which get returned sometimes as they come across some damage during the delivery process.
A Government official came with certain clarifications on such queries and said that:
- There would be a refund on TCS process in course of damage and return of goods and products or a canceled order. In such cases, there would be no liability of the e-commerce operator.
- All the foreign e-commerce operators whose suppliers are India based, on a mandatory basis are liable to be registered with the GST Council and Tax collected at source would not be charged on any such imported goods.
The New GST taxation rule is being applicable just prior to the festival, the E-tailers believe that the TCS provision is going to badly affect the revenue of their Company.
Tax collection through New GST rule is going to help the government to approach the target of Rs. 1 Lakh Crore. It would also be beneficial in improving the compliance and preventing Tax evasion.
Though, the delay and the three times postponing of the implementation and collection would increase the compliance cost on suppliers and the Online marketplaces as now it has become mandatory to get registered under GST even the Annual turnover is less than 20 lakh.
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