Thursday, 16 June 2016

GST and its effect on e-commerce firms (5 points which may affect your Online Business)

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GST, which has been long in waiting, could finally be implemented in Apr 2017. Though the aura and suspense is still very much intact, but there are some very anxious moments for all the entrepreneurs who are looking to register new company in E-commerce space. Below are 5 points which may affect Online Business Registration:
1-    A clause in GST draft model suggests that for any payment made to a supplier by e-commerce company or market place, Tax Collection at source would be responsibility of e-commerce companies. E-commerce companies would, therefore, need to keep a track of all the sales made through their platform and also file a statement to this effect.
2-    Even a mid sze e-commerce company has atleast 100+ vendors and therefor the compliance burden on e-commerce companies would increase.
3-    As per a major e-commerce company, the proposed law would affect the working capital requirements of the sellers.
4-     Many of these suppliers (vendors) are below the minimum threshold required to file GST and hence e-commerce companies will have to Grapple with additional burden of tax refunds.
5-    As per some sources the threshold for filing would be 9 Lacs

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