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|Cabinet approves GST, e-commerce cos to pay up to 1% tax|
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New Delhi, Monday, March 20, 2017 | 11:35 IST
The Union Cabinet has cleared four supporting GST legislations that will soon be introduced in Parliament paving the way to implement the landmark tax reform.
The four approved bills are Compensation Law, the Central-GST (C-GST), Integrated-GST (I-GST) and Union Territory-GST (UT-GST).
These supporting legislations will be introduced as money bill in Parliament this week.
However, for online retail firms like Snapdeal and Amazon there is some bad news.
The model Goods and Services Tax law, finalised by the GST Council, provides for 1 per cent Tax Collected at Source (TCS) to be deducted by the e-commerce operators.
Starting from July 1, e-commerce companies will be required to deduct up to 1 per cent TCS while making payments to their suppliers.
Experts had raised concerns saying this would mean that a similar amount will have to be levied on inter-state movement of goods, taking the total TCS deduction to 2 per cent.
"We have included the word 'up to' in the final model GST law. This would mean that TCS would not exceed 1 per cent of the sale proceeds," an official said.
Industry has been expressing concern over the TCS provisions saying it would mean a lock-in of capital and also dissuades companies from selling through online aggregators.
E-commerce companies will also have to file returns on the TCS deductions, but in case of return of goods by the consumer, these companies will not have to deduct TCS as there is no actual sale.
The model law had defined 'electronic commerce' as supply of goods or services, including digital products, over electronic network.
'Electronic commerce operator' would mean those persons who own, operate or manage digital or electronic facility or platform for electronic commerce.
(With inputs from PTI)
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