The e-commerce firms running in India have only ten days left to register for goods and services tax (GST) in all states.
Foreign players such as Amazon, Google, and Apple operating in the country also have to comply with it before October 1.
The government had last week through a notification asked these firms to collect tax at source from next month. All the e-commerce players including foreign ones
need to register with all the states they are operating in.
As per government notifications, e-commerce firms have to deduct up to 1 per cent state GST and 1 per cent central GST on intrastate supplies of over Rs 2.5 lakh. For interstate supplies of over Rs 2.5 lakh, TDS will be 2 per cent integrated GST, said an ET report.
Though, in the case of both state and central GST, the rate of tax deduction will be 0.5 per cent.
The move is to ensure payment trail to avoid tax evasion by e-commerce firms. According to the govt, it will help curb the non-reporting and under-reporting of transactions.
However, e-commerce firms are feeling uneasy as they have to additionally furnish statement every month along with filing regular annual statements.
Besides, the upfront collection of the tax would impact the cash flow of merchants selling on their platforms. Sellers on these platforms also complained that the move would eat up their thin margin and add to operating cost.
Sellers also have to bear the entire tax burden in case of mismatch of information. E-tailers have expressed their apprehension over it and said that this might push sellers to choose offline channels.