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Online retailers fight to register GST in different states

By FashionUnited

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Under the proposed goods and services tax (GST) regime,India's largest online retailers are promoting hard against requirement to register in each state, which may not allow them to accept products from small dealers with annual turnover of Rs 20 lakh as they have been kept outside GST.

If an ecommerce firm still sells products of an unregistered dealer, it will have to pay full tax without the benefit of input tax credit. Meanwhile, India's ecommerce websites conveyed to the finance ministry and GST Council that they will have a tough time with compliances if they have to register in individual states. The GST regime will also remove any incentive for an online portal to sell the product of an unregistered dealer.

Sanjay Sethi, CEO of ShopCluesstates that thesebarriers will keep small traders away from digital marketplace. The mandatory registration would discourage small merchants to sell through the ecommerce platform as they will need the ecommerce operator's platform, saysPriyajit Ghosh, Partner Indirect Tax, at KPMG India.

Talking about the multiple registrations etailers are trying to reason with the government to save them from having to register in each of the 29 states and seven union territories under the GST regime. The Flipkart executive requested Adhiato facilitate a sort of single-point registration rather thanGST Council doing away with multiple registration, and they don't need to take such registration in individual states under the VAT regime. Amazon India, however, has not accepted Karnataka's interpretation that it is a “dealer“, and maintained that it is only a technology company providing a digital platform for buyers and sellers to carry out transactions. A senior VAT commissioner handling GST migration said an ecommerce company need to have GSTIN in both the state of origin of trade. For example If an ecommerce firm sells products from 100 dealers from its fulfilment center in Bengaluru, and deducts 1 per cent tax at source, the buyers in dozens of other states can claim credit for the tax already paid.

Amazon executive, confirmed that it would be unfair on part of anyone who works on an inventory model andthey have appealed to the government to facilitate remittance of GST through registration in a single state further they did not wish to be identifiedon the other hand Flipkart and Amazon refused to the comment.

Amazon
Flipkart