E-commerce firms petition government over upcoming GST regulations

Large e-commerce firms including Amazon and Flipkart have asked the government to defer its planned Goods and Services Tax (GST) regulation amendment that is set to be enforced on October 1, as it would create compliance issues.

E-commerce firms petitioned government over GST regulations set for October 1 - F2F

From October 1, e-commerce firms will be required to collect GST of around one percent when they make payments to suppliers over state lines totalling over Rs 2.5 lakh ($3,446). However, this could be interpreted that large e-commerce firms like Amazon, Flipkart, and others need an office in every state in order to do this. The businesses have stated that this would create compliance and working capital issues.

Government officials have responded to this by stating that, although the GST revision will go ahead, e-commerce firms will not be required to have a presence in every state in order to comply. “States are concerned about revenue,” the Economic Times reported a government official as saying. “They also felt that the industry was given enough notice.” The government will also issue a FAQ to clarify the new regulations.

For easier compliance in general, e-commerce companies could register with “single registration”. The government may need to make legislative changes to allow this, however.

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