The government has announced that the much feared and much loved Goods and Services Tax (GST) will be hitting the stands on 1st July 2017.

But do you know everything there is to this new law? Are you aware of how it will affect you and your online selling business? What are some of the impacts you will endure? Let us take a look at how this tax will change day-to-day ecommerce.

The following table (courtesy PwC) sums up how things are at present, and what will change under GST for both the seller and the marketplace.


GST influenced changes in Indian ecommerce

PwC has pointed out in its study that there is ambiguity on the applicability of the tax in case of returns, replacements and discounts. The products that are returned can travel across states, and the replacement could go from a different state. The GST has not provided for such situations that are common in ecommerce.

Experts note that the GST will ensure greater taxes for the government, due to the removal of the limit of the taxable amount (everyone, irrespective of their scale, is being brought under GST).

The confusion that CST brings in

In February, leading online marketplaces Amazon, Flipkart and Snapdeal had held a joint press conference to protest against TCS. However, online sellers had reacted to this by saying that only those who evaded taxes need fear TCS. At the same time some sellers said that reclaiming the TCS paid in case of product returns can be a tiresome process.

The full impact of the benefits and pitfalls of GST can be gauged only once it is functional. Until then, all parties in ecommerce don’t have much choice other than to prepare themselves for the change.

We hope you have registered, as it is mandatory. If you need any help in understanding GST in detail, call Browntape. We are India’s largest ecommerce service provider, and can help you out with any of your needs.

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