GST to smoothen business process for ecommerce firms

02 Jan '15

2 min read

The proposed Constitution Amendment Bill on Goods and Services Tax (GST), introduced by Finance Minister Arun Jaitley in Lok Sabha last month, is expected to smoothen business process (ease of doing business) for ecommerce companies by resolving several supply chain issues that plague the sector, according to experts.

GST is a single tax regime, applicable across states, on the sale, manufacture and consumption of goods and services. It will simplify and harmonise the indirect tax regime in the country, and is expected to foster a common and seamless Indian market.

The proposed GST has been designed keeping in mind the federal structure enshrined in the Constitution. Central Government taxes like central excise duty, additional excise duties, service tax, additional customs duty (CVD) and special additional duty of customs (SAD), etc will be subsumed in GST.

At the state level, taxes like VAT/sales tax, central sales tax, entertainment tax, octroi and entry tax, purchase tax and luxury tax, etc. would be subsumed in GST.

All goods and services, except alcoholic liquor for human consumption, will be brought under the purview of GST, which means all apparel and fashion products sold through retail and ecommerce would fall under the purview of GST.

On its implementation, tentatively next year, GST will lead to lesser paperwork, and ecommerce companies will be able to more fine-tune their supply chain strategies, as they no longer would be required to base the same on local tax requirements like octroi.

A uniform tax structure across India, as proposed under GST, will mean that ecommerce companies will be able to decide on selling prices without worrying about the city/town where the product would be finally shipped. (RKS)

Fibre2fashion News Desk - India

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