Ecomm Big­gies Join Hands to Seek Changes in GST Law Ama­zon, Flip­kart, Snapdeal wor­ried about tax col­lec­tion pro­vi­sion

The Economic Times - - Companies: Pursuit Of Profit - Ch­havi.Tyagi

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New Delhi: The big­wigs of ecom­merce, in­clud­ing Ama­zon In­dia head Amit Agar­wal, Flip­kart co­founder Sachin Bansal and Snapdeal co­founder Ku­nal Bahl joined hands to seek mod­i­fi­ca­tions in the draft ver­sion of the GST (goods and ser­vices tax) law. Ecom­merce com­pa­nies are wor­ried about the tax col­lec­tion at source (TCS) pro­vi­sion in the GST. The pro­posed GST model makes these com­pa­nies re­spon­si­ble for the col­lec­tion of taxes on be­half of its sell­ers and mer­chants. With GST ex­pected to be fi­nalised by this month, ecom­merce ri­vals for the first time pre­sented a joint front to put pres­sure on the gov­ern­ment.

“The pro­posal of tax col­lec­tion at source, di­rected only at ecom­merce mar­ket­places, in the Draft Model GST Law, will hurt lakhs of small sell­ers by mak­ing on­line sales ex­pen­sive and cum­ber­some for them,” said Bahl of Snapdeal. “The pro­posal, while adding need­less com­plex­ity for the sell­ers, pro­vides no ben­e­fit to the tax aut- hori­ties and will lead to du­pli­ca­tion of in­for­ma­tion fol­lowed by the need for its rec­on­cil­i­a­tion. It is a mea­sure, which goes against the spirit of mak­ing In­dia dig­i­tal and im­prov­ing the ease of do­ing busi­ness in the coun­try.” “We re­main con­cerned about the tax col­lec­tion at source pro­vi­sion which we be­lieve will neg­a­tively im­pact the growth of mar­ket­places at a stage when the in­dus­try is still in its in­fancy,” said Amit Agar­wal, coun­try head for Ama­zon In­dia. “There is an ur­gent need to reeval­u­ate such an oner­ous re­quire­ment, we are work­ing with the gov­ern­ment on this and hope for a favourable res­o­lu­tion.” Each ecom­merce ma­jor has more than a lakh of mer­chants on its plat­form and they are wor­ried that be­ing in charge of tax col­lec­tion for these in­creas­ing num­ber of sell­ers is go­ing to be time con­sum­ing and cost am­pli­fy­ing process for them.

How­ever, tax ex­perts are not con­vinced by the rea­son­ing of these ecom­merce com­pa­nies.

“It is go­ing to be dif­fi­cult for the gov­ern­ment to keep track of all these ven­dors and on the other hand, these ecom­merce com­pa­nies are strate­gi­cally placed in the mar­ket­place, so the onus falls on them,” says Agar­wal Sing­ha­nia & Co, Part­ner, Ankur Agar­wal. “While it may in­crease com­pli­ance for these com­pa­nies, this is a way for­ward to a trans­par­ent econ­omy. These com­pa­nies are at the fore­front of de­vel­op­ment and it should not be dif­fi­cult for them to cre­ate soft­ware for easy com­pli­ance.”

Flip­kart had re­cently rolled out a pro­gramme to as­sist its mer­chants with GST com­pli­ance. Called GST Ge­nie, the pro­gramme brings to­gether a net­work of in­di­vid­ual char­tered ac­coun­tants and plat­forms like Tally and ClearTax to help its mer­chants.

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