A study by CII-Deloitte says that implementation of GST will help resolve various issues concerning taxation and logistics with regard to e-commerce business, which has been recording rapid growth in the country.
The e-commerce space has rapidly evolved but several challenges have surfaced primarily in areas of taxation, logistics, payments, internet penetration and skilled man power, the CII-Deloitte report on ‘e-commerce in India – A Game Changer for the Economy’ said.
“In taxation, for example, the lack of a uniform tax structure leads to several issues such as double-taxation or impediments in the free flow of goods across the country. However, the ensuing Goods and Services Tax (GST) is expected to help in overcoming these challenges through a uniform tax structure,” it said.
Clearly defined rules for e-commerce transactions in GST and a consultative approach while framing these rules will be favourable to both, the Government as well as e-commerce companies, it added.
It also said timely and effective implementation of programmes like Digital India, Make in India, Startup India and Skill India will support the e-commerce ecosystem to overcome the challenges related to ineffective rural internet penetration and lack of skilled manpower.
The report has recommended several measures including in the areas of direct and indirect taxes to promote this sector.
It said documentation requirements should be simplified for applying tax treaty provisions such as declaration by the payee, as opposed to tax residency certificate; and simplified mechanism should be in place to obtain lower or nil withholding tax certificates for the companies, without requiring payer details.
According to CII Director General Chandrajit Banerjee, “E-Commerce industry has been directly impacting the MSMEs in India and has a favourable cascading effect on other industries. In the long term, it has the potential to generate employment, increase export revenues and enhance tax-collections”.
lauding the efforts of the Government to boost the growth of e-commerce sector in India, he says “CII is committed in its endeavour to modernize and improve sustainability of the sector.”