The Goods and Services Tax (Called as GST) is an indirect tax reform which aims to remove tax barriers between states and Centre. So, This will create a single market. Once this step is taken, the tax barriers between states and Centre and states will disappear. The main objectives of reducing tax evasion and making a tax payment to the taxpayers are the main aims of the government through GST. There are cases in which the Government can not find tax evasion and tax returns in the existing tax structure.
The rising of Electronic Commerce in India has also affected in the conception of online marketplaces. A Marketplace is an e-commerce platform owned by the E-commerce Operator such as Amazon, Flipkart, Snapdeal, Ebay, Mantra, Jabong etc.
Some of the features of a marketplace model are:
e-commerce businesses may be applied all or some of the following:
Online buying or selling transactions are referred as e-commerce. A person or company who owns, manage or operate an online platform to sell goods or services electronically known as an electronic commerce (e-commerce) operator. Companies such as Flipkart, Amazon, Ola, Uber, are fallPaytm, OLX, Fall under the category of e-commerce players. In India, e-commerce market is growing at a fast pace. In current regime there are multiple indirect taxes are levied on the online transactions. In these indirect taxes, some of the taxes are collected by State Government, and some are collected by Central Government. There is a complex tax environment for the e-commerce which brings ambiguity and disputes but now new GST taxation will affect the fundamentals of tax in e-commerce. The first time Indian Government has taken the initiative to regulate the e-commerce business.
There are some issues in the current regime such as
1. Who will pay the Tax –
In an e-commerce transaction, there are multiple parties involved, so it becomes difficult for the tax authorities to identify who is the actual seller and who will pay the tax.
2. Waybills –
For the inward and outward of goods in a state generally, the e-commerce operators have to produce waybills for the movement of goods. Waybills compliance restricts the free movement of the goods within India, and it is a regulatory burden on VAT authorities as well as e-commerce operators.
3. it’s hard for the tax authorities to track the discounts on every product.
4. There is a high rate of returns and cancellation of the orders in the e-commerce industry. It is also a difficult task to track every order for the tax authorities.
5. E-commerce has a complex transaction structure which leads a credit blockage at every stage it translates the higher cost for e-commerce operator as well as the customer.
The introduction of GST will simplify the highly complex tax environment due to multiple taxes, tax cascading, convoluted compliances and extensive litigations. GST will streamline all the indirect taxes and will be lined with international tax practices. There are three kinds of taxes under GST –
Though there will be an improvement in the current tax structure after GST e-commerce requires lots of reform to make the process simple and smooth. With the implementation of GST e-commerce businesses and consumer, both will be benefited.