E-commerce cos to levy 1% TCS on sellers

New Delhi: E-commerce consumers are likely to remain unaffected once GST sets in from July 1, even as players like Amazon and Flipkart prepare to deduct 1% of the payment they make to sellers under the new tax regime.

While the move is not expected to impact consumers directly, it is expected to bring more transparency as the tax collection system gets more streamlined, experts said.

Revenue Secretary Hashmukh Adhia on Friday announced that e-commerce players will have to deduct 1% TCS (tax collected at source), while making payments to suppliers.

“We believe that GST is good for the ecommerce industry as it would eliminate hurdles in inter-state delivery and subsume the entry tax introduced on ecommerce shipments by some states,” an Amazon India spokesperson said.
The US-based firm said it is studying the developments very closely and is working on enabling its seller ecosystem to be compliant with GST regulations. 

In February, the online retail heavyweights had come together to voice concerns around TCS. They had claimed that if TCS was implemented, it would result in a capital lockdown of about Rs 400 crore per annum, and discourage merchants from selling online.