New Delhi: Amazon, Flipkart and some other e-commerce service providers may not need offices in each state to meet withholding tax in accordance with VAT. You will have to collect this tax if you make payments to suppliers on October 1st.
The e-commerce platforms informed the government that the deployment was delayed. They said it would create compliance issues for them as they would need a presence in every state. Suppliers have problems with working capital, they added.
Representatives of state and central governments who met one day before the meeting of the GST Council supported the implementation of the provision because of concerns over revenue, but agreed that presence in each state should be facilitated.
“The states are worried about the revenue … They also felt that the industry was well informed,” said a government official, aware of what was happening at the meeting.
It was decided that these companies would not need a branch in a state to register, the manager said.
The government will also publish a series of detailed statements in the form of frequently asked questions.
The issue could play a role in the meeting of the GST Council on Friday.
Etailers had also requested a single registration to fulfill this requirement. The tax experts believe that this will relieve some of the players in e-commerce. “Ecommerce operators will benefit from relief as there is no need for a physical address to register with TCS, but continued compliance would continue to be a problem for multiple registrations.” said Bipin Sapra, partner of EY.
Experts say simple registration is urgently needed to facilitate compliance. “For an e-commerce player with an office in a state offering goods or services, it would be difficult, so being able to register without office demand is pragmatic, which makes the registration process a little easier.” said Pratik Jain, National Director of Indirect Taxes, PwC.
“However, the government should consider setting up a one-off registration system for e-commerce companies, which will make things much easier, though it may require legal changes.”
According to these provisions, in the case of domestic deliveries exceeding LIT 2.5 billion, the notifiers have to deduct up to 0.5% of the State GST and 0.5% of the central GST. For interstate deliveries of more than 2.5 lakh, the TDS is included in 1% of the GST. These provisions are designed to investigate tax evasion as TDS / TCS leaves behind a series of transactions. Although the tax rate mentioned in the provision reaches 1%, the government has reduced this rate by 0.5%.
These provisions were to be implemented with the introduction of the GST with effect from 1 July 2017, but the GST Management Board was extended by one year to 30 June 2018. He was postponed again to September 30th.