Ecommerce companies are to collect tax at source from October 1,2018
Players in this segment have requested for a provision for single registration instead of multiple state registrations
The provisions are aimed at keeping a check on tax evasion
Foreign ecommerce companies operating in India such as Amazon, Google, among many others will have to register themselves for Goods and Services Tax (GST) in all the states of India in the next 10 to 12 days.
The central government has ruled that both Indian and foreign ecommerce companies are to collect tax at source from October 1, 2018.
Following this rule, the players in this segment have requested for a provision for single registration instead of multiple state registrations as it would increase their compliance costs.
However, the government has still maintained its decision for the companies to register with every state in the country.
Under this rule, notified entities will have to deduct up to 1% state GST and 1% central GST on intrastate supplies of over $3.46K (INR 2.5 Lakh).
In the case of interstate supplies for an amount over $3.46K (INR 2.5 Lakh), TDS will be 2% including GST.
These provisions are aimed at keeping a check on tax evasion as Tax Deducted at Source (TDS) and/or Tax Collected at Source (TCS) will leave a trail of transactions.
Further, there will be no TCS liability on a seller, based outside of India and is working on foreign ecommerce platforms.
All though, the provision mentions the rate as up to 1%, the current rates will be 0.5% each for state and central GST.