E-commerce and GST come against each other, with TCS, a provision of GST; making e-commerce big shots to come forward on the platform together to make reformations on the draft of GST bill passed by the Government. Amazon, World’s largest e-commerce industry, Flipkart, India’s largest e-commerce industry, and Snapdeal, India’s third largest e-commerce industry came together to demand change in the amendment of the GST bill. The leaders of these big startups opposed the section of GST which consists TCS (tax collection of source), applicable only to e-commerce industry, adds a lot of problem to the sellers which are directly associated to the e-commerce giants.
Kunal Bahl, CEO, snapdeal said that there are no concern for GST and claiming GST a very good move. He also claimed GST to very important to move forward the e-commerce industry. The only issue ,Kunal said, they are facing is with the TCS. He condemns TCS to add a significant burden on the sellers and dampen the growth of the industry going forward. Kunal quoted the impact of GST to be currently ‘unquantified’ but the growth trajectory to be significantly hitted by the TCS.
Speaking on the other ways to deal with the Government’s move to make a tax compliance society, Kunal added that the process which the e-commerce industry follows is very simple and easy to hold accountability on the sellers as all the transactions made are digital, also the datas are shared with the centre and state government.
Amazon India Head Amit Agarwal, Flipkart Cofounder Sachin Bansal added TCS not to be ‘positive for sellers’ and impact of TCS to ‘lock up the working capital of the sellers’. They also said that their intent is to bring transparency and bring out the real time information on transactions but without hitting the capitals of the sellers or the industry.
Bansal estimated a rough analysis of the loss as Rs. 400 crore per year, affecting large numbers of SMEs and factories associated with the Startups. He added that a chain of customers are created when any purchase is done. By TCS the primary customers will be affected, which will eventually lead to the damage of the whole chain of management which will be difficult to recoil if hitted at the primary section.