GST update: E-commerce players get respite from TDS collection
As the nation gets ready for the new Goods and Service Tax regime, e-commerce companies such as Amazon and Flipkart are given a temporary relief from one of their preparation burdens by the finance ministry.
They'll not be required to immediately collect 1% TCS (tax collected at source) on payments made to their vendors from July 1, said the ministry.
Here's all about it.
GST registration for small businesses also get delayed
Another reason to be happy
Moreover, alleviating concerns of e-commerce players, the finance ministry said small businesses, which sell their products on these online platforms, will not have to register their operations immediately from July 1, the day when GST kicks in.
This addresses the fear e-commerce players had about losing businesses due to the fact that a large number of their small suppliers are not GST ready yet.
This is not a permanent fixture
It's a temporary relief in reaction to the requests made by the e-commerce players to the government and the provisions of Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) will be effective from a later date decided by the government.
Under GST, notified entities will have to collect TDS/TCS of 1% on payments above Rs. 2.5 lakh from goods suppliers.
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This will help a lot
According to the new directive, businesses, with less than Rs. 20 lakh turnover, will not have to register to sell goods or services on e-commerce portals.
It's a race against the clock
All India Online Vendors' Association said, they welcomed this move, as it gave the much-needed breather to the marketplaces, however, they would like to see TCS being implemented soon, as it would give firms a level playing field.
With few days left on the calendar for the biggest tax reform in India's history, businesses both offline and online are hurrying to be GST compliant.