The Government has postponed implementation of GST provisions that deal with the Tax Deducted at Source (TDS) and Collected at Source (TCS) that requires e-commerce players like Snapdeal, flipkart and Amazon to deduct the tax at source at the time of making payment to their vendors selling on their online portals from July 1 under the GST regime.
In addition to the above, the government has also clarified that the small vendors that are selling on e-commerce portals are not required to get thenmselves registered immediately.
The Big e-commerce players were in a fear of losing their small vendors who are large in numbers because most of them have not yet registered or enrolled under GST.
The Amazon Spokesperson said that “this relief will ensure the smooth functioning of the business and will benefit our sellers since they will not be in pressure of cash flow in between they are transitioning into a new tax system”.
The finance ministry in a statement issued on monday clarified that the E-commerce players will not be required to collect tax at source at the time of making payment to their sellers at the rate of 1%.
As per the provisions of the Goods and Service Tax act, there is requirement of deducting or collecting tax at source at the rate of 1% at the time of making the payment in excess of Rs. 2.5 lakhs to the suppliers of goods and services. Now the delimma has arisen in the applicability of this provision.
As for now, the finance ministry has said that the provisions of tax deducted at source (Section 51) and tax collected at source (section 52) has been postporned by the government based on the feedback received from trade and industr for the smooth rollout of the new GST tax Regime.
According to the finance ministry the new date of the implementation of the provisions of section 51 and section 52 of the Goodss and service Tax Act will be announce later.
The statement also added that the small vendors that are selling goods on the e-commerce portals and do not have the turonver of more than Rs. 20 lakhs are not required to get the GST registration. This step will provide more time to the E-commerce companies and their suppliers for preparing for the new tax regime.
The GST portal www.gst.gov.in has been started from 25 June for accepting the applications for new registrations as well as enrollment, keeping in mind the huge rush it is difficult to predict that all the registrations would be done before the rollout date July 1.