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GST may hike costs of Indian ecommerce players
May '15
Once implemented, the Goods & Service Tax (GST) may in particular, impact Indian ecommerce retailers, who may witness their costs going up.

Costs may move northwards for online retailers or their vendors as they would be liable to pay taxes even if the goods are stored in their warehouses, according to media reports.

The tax paid would be returned only once the said goods are sold and which could range anywhere between one to three months.

According to experts, the cost for online retailers may increase between 10-15 per cent once the GST is brought in to force.

One way of limiting this cost for etailers would be to manage their inventory properly and carefully and avoid transferring inventories between states.

It is because transferring inventory between states, would lead to more taxes, leading to more financial burden on ecommerce players.

Currently, many ecommerce retailers are offering very high discounts to customers, which are expected to pare down once GST comes in to play.

The current government is trying to push the GST bill through the parliament and is expected to make a bid again for its passage in July 2015. (AR)

Fibre2fashion News Desk - India

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