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Indian e-commerce industry insists on GST

Update On :27 February 2016

Indian e-commerce industry insists on GST

Ecommerce industry warns of crisis if GST not passed as it will bring a huge benefit for ecommerce companies in India. The Internet industry body has entrenched the passage of the crucial Goods and Services Tax in a representation to the government. The Internet and Mobile Association of India (IAMAI) said that various states levy different taxes on sellers on these ecommerce marketplaces of micro, small and medium businesses scattered across India which are difficult to comply with and the industry is seeking a common rate and some clarity on taxation in order to boom.

Subho Ray, president of IAMAI said that while the large ecommerce companies in the country may have the wherewithal to deal with such issues, the smaller players who are still trying to find their feet in the market do not. He added, "Right now we have 5-6 states troubling the industry, if the GST doesn't get passed in the Parliament, we will have all issues with all 28-29 states.” Ray said that only two to three large players may be able to survive in such a situation.

According to a certain law in the state, orders above Rs. 5,000 can't be delivered from across the state. Similarly, the government of Uttarakhand has also levied a 10 per cent additional tax on goods delivered via ecommerce. The GST bill, which subsumes all indirect taxes to create one rate and integrate the country into a single market, is the biggest tax reform that is being undertaken since Independence, but is pending approval of the Rajya Sabha.

According to IAMAI, the extant tax structure of India is heavily fragmented, with multiple indirect taxes levied by different authorities at different stages of a transaction. GST will help the digital industry business model flourish by providing uniformity in tax rates and regulations across the country. This will help doing business in India easier, allow free-play to market dynamics and allow deeper penetration of these services.

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