Update On :17 February 2016
The expectation of E-commerce sector in the Union Budget 2016 which is about to presented by Finance Minister on 29 February 2016 is very high. The unprecedented growth of the e-commerce sector has largely been driven by rapid technology adoption and access to the internet through broadband, 3G/4G, etc. resulting in an increased online consumer base. Due to the digital revolution, the sector in India has grown four times its size since 2009 and continues to grow at a CAGR of more than 35 per cent.
Amidst all this action, the Government of India liberalized the FDI regime wherein the companies engaged in manufacturing and single brand retail have been allowed to undertake e-commerce activity. This change is expected to further increase the breadth of this sector. This explosive growth in the e-commerce sector has given rise to multiple tax issues. Besides battling their conventional problems owing to their innovative business models is also a matter of concern.
Given that these new business models are here to stay, there is a need for the government to support this sector through enabling changes in the tax and regulatory regime. Access to internet connectivity in rural areas will boost the economic and domestic spending of the country as more citizens will be able to access e-commerce sites. This will provide much needed growth to the e-commerce sector.
This young generation of budding entrepreneurs is ecstatic of the way the Indian government is encouraging e-commerce and start-up ventures. The recently introduced Action Plan by the government for start-ups, followed by regulatory relaxation by Reserve Bank of India (â€˜RBIâ€™), is certainly a step forward in the right direction and has given a positive vibe to entrepreneurs and the industry. Along with this, redressal of some of the tax issues in the upcoming budget can serve as icing on the cake.
News Source From : http://www.moneycontrol.com/news/economy/budget-2016-time-to-buildtax-system-that-supports-growthecommerce_5483641.html