E-tailers may be offered easier return filing rules for TCS under GST

E-tailers may be offered easier return filing rules for TCS under GST
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New Delhi, Sep 24: The government may give e-commerce companies more time to file the first set of returns on a new levy that will kick in from October 1, giving a breather to anxious e-tailers who aren’t sure how the tax will affect their businesses.
According to Goods and Services Tax (GST) related laws, e-commerce companies will have to collect one percent as tax collected at source (TCS) for each transaction carried out on their online marketplaces.
Sources said that the government will likely extend the first month’s return filing date to ease online marketplaces’ transition to the new system, but will not push back the levy’s implementation by three months as demanded by etailers.
Under rules, companies are required to file returns by the following month’s 10th day. In this case, since TCS will be applicable from October 1, e-tailers would have had to file their first set of returns by November 10.
“The return filing date can be extended beyond November 10. We will wait to receive the data from the industry and depending on the genuineness of the issues, may look at deferring the date of tax collection,”’ a senior government official said.
The government will come up with a set of frequently asked questions (FAQs) soon, clarifying rules, which will address major concerns such as place of registration and rules for foreign companies, among others.
Companies such as Flipkart, Snapdeal and Paytm among others, met finance ministry officials last week to seek clarity on the rules related to TCS.
Ecommerce companies have sought easier procedures, including a single registration system that will allow them to avoid the hassle of registering in different states where they carry out business, a demand that the government is likely to agree.
There was also uncertainty about the tax’s applicability on goods that customers return because of various reasons such as faulty or broken packaging among others.
A government official said that the supplier will be allowed to seek a refund on TCS on a cancelled order or a returned product.
“The liability will not be on the e-commerce operator,” the official said.
Similarly, in case of imported goods, TCS may not be levied, the official said, adding that registration will be mandatory for foreign e-commerce operators if the supplier is based in India.
E-tailers fear that the TCS provision will disrupt the ecosystem, since it is coming right ahead of the Diwali festival, a critical phase of the year for these companies in terms of revenue.
The levy, even though unlikely to yield a large amount in taxes, will still incrementally help the government move closer towards the monthly GST tax collection target of Rs 1 lakh crore, improve compliance and prevent tax evasion.
The levy, which has been pushed back thrice in the last one year, could raise the compliance cost on suppliers as well as online marketplaces as in this case it is mandatory to register under GST even if the annual turnover is less than Rs 20 lakh.