Key tax provision’s implementation deferred in GST; relief for ecommerce players

The government of India has deferred the date for implementation of a key tax provision which mandates the ecommerce firms to collect 1% TDS (Tax Deducted at Source) while making a payment to the suppliers under the new GST regimen. Additionally, small businesses that sell through these ecommerce platforms don’t have to register themselves immediately. Ecommerce players had raised this issue in a representation to the government, and are relived after the deferment. Amazon India officially commented that “This ensures business continuity for the marketplace but most importantly benefits our sellers since they don’t have to deal with pressures of cash flow at a time when they are transitioning into a new tax regime”.

Under GST, small businesses with a turnover of less than INR20 lakh must register themselves for selling goods or services through ecommerce portals. The GST Network portal has started accepting registration of TDS, TCS deductors and ecommerce operators only from June 25. But the e-commerce players had feared losing business as many small suppliers were yet to register their operations as required under GST guidelines. An All India Online Vendors’ Association (AIOVA) spokesperson gave the announcement a balanced view and commented that “We welcome the move as it gives breathing space to marketplaces but would like to see the TCS implemented as soon as possible as it gives level playing field”.