Goods And Services Tax is the latest point of discussion due to its transition importance. This system will void all existing indirect taxation system by April 2017. However, this is a tentative date, which might extend further, but for now, businesses must get prepare according to this deadline. For e-commerce companies, it will ease many hurdles as the Goods And Services Tax model proposed has a Tax Collection at Source mechanism in it. The E-commerce companies are classified under the “Supply of goods and/or services including digital products over digital or electronic network” category. This term includes every individual who provides or takes or operates services under this platform.
This Tax Collection at Source or TCS mechanism proposed in Goods And Services Tax requires the e-commerce company to deduct a tax rate of 1% on the net value of taxable supplies which will be deposited with the Government. This system will void all the state government taxation from the E-commerce companies. For COD or Cash On Delivery supplies, it will create a little hassle as the operator has to make refunds for cancelled order for which tax has been deducted already. The cancellation for COD is quite high in India that will be the matter of concern for the E-commerce companies. Further, Goods And Services Tax will require taxation on the stock transfer made by the E-commerce industries which is now not liable for any taxation. Currently stock transfer only requires custom tax and entry tax in appropriate cases only. This new system will impact the small and medium enterprises a lot who earns via internet platform.
This is highly required that all the e-commerce player must clear their conception about this new system before the transition takes place to play it safe. Though this Goods And Services Tax is designed to incorporate the entire market into a single platform, but the effect on the e-commerce industry will be huge.
Also Read : Deductions That NRIs Can Avail Under Section 80 Of Income Tax Act
This is highly required that all the e-commerce player must clear their conception about this new system before the transition takes place to play it safe. Though this Goods And Services Tax is designed to incorporate the entire market into a single platform, but the effect on the e-commerce industry will be huge.
Also Read : Deductions That NRIs Can Avail Under Section 80 Of Income Tax Act
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