4/10/2020 Impact of GST on E-commerce sector - Re-Tales by Kunal Wadhwa | ET Retail

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Impact of GST on E-commerce

sector
Kunal Wadhwa Sep 05, 2016, 03.17 PM IST

Kunal Wadhwa
Partner, Indirect Tax, PwC India

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Passage of the 122nd Constitutional Amendment
Bill (CAB) by the Rajya Sabha is clearly a
significant milestone achieved in the journey of
GST in India. While passage of the CAB has
brought in a lot of joy to the businesses as well as
the policy makers, the e-commerce sector has
reasons to shy away from the Model GST Law
released in the public roman on 14th June 2016, as
it stand today.

Key pain points for the e-commerce sector are

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4/10/2020 Impact of GST on E-commerce sector - Re-Tales by Kunal Wadhwa | ET Retail

provisions relating tax collection at source, heavy

compliance burden and multifold reporting.

The provisions relating to tax collection at source

has been introduced in the Model GST Law for all
sale of goods done through e-commerce portals
wherein the payment to the seller is made by the
marketplace. In such cases, the market place
would be required to deduct tax (likely to be 1%) at
the time of making payment to the sellers. This
would lead to issues such as a credit accumulation
for retailers who operate on thin margins, cash flow
issue, etc.

One of the biggest and serious concern arises on

account of the registration provisions for retailers
selling through e-commerce portal. The Model GST
Law provides that the marketplace and the seller
selling goods through e-commerce portal would be
required to register under the GST law, irrespective
of the threshold. Specifically, for the small &
medium enterprises (SMEs) selling through e- Kunal Wadhwa
commerce, it is a draconian provision and could Partner, Indirect Tax, PwC
actually lead to a complete wash out of the SMEs India

from selling through e-commerce portals. Kunal Wadhwa is a

partner in the Indirect
Tax practice in PwC
India, specialising in IT
and E-commerce sector.
Prior to PwC, Kunal was
Director Indirect Tax at
BMR. Over the past
Show more..

Other Authors

The GST Law binds the e-commerce operators

with some undue compliance burden such as
registration, reporting and match reconciliation.

Additionally, the Operator may also be required to

furnish information relating to supplies made

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4/10/2020 Impact of GST on E-commerce sector - Re-Tales by Kunal Wadhwa | ET Retail

through the Operator, stock of goods held in

warehouses managed by such operators and
declared as additional places of business upon
issuance of a notice by the Authority as prescribed.
Such information would have to be furnished within
5 working days of service of notice. Considering the
volume / quantum of transactions undertaken
through the Operator on a daily basis, 5 days may
not be sufficient time to furnish such information,
specifically where there is no scope for extension of
such time limit.

Apart from the above, there are certain

unaddressed issues in the Model GST Law.

In the case of sales returns, wherein the tax is

already deposited based on credit to supplier or
payment received, there are no provisions for either
reversal or adjustment of the tax already paid.
Specifically, the law should specify that supplies
View More 
and returns within the same month should not be
Other Re-Tales
liable under this provision.
Will India's retail
The GST Law also requires matching of the data industry survive
filed by the Operator with the date filed by the the COVID-19
lockdown?
seller. Further, in case of a mis-match, the liability Sanjay Vakharia
has to be discharged by the seller. There is no CEO, Spykar Lifestyle

provision provided for the e-commerce operator to

correct the discrepancy, if any, in the statements Covid-19:
Opportunities in
filed by such e-commerce operator. This type of crisis for Indian
deemed supplies where the liability is being luxury market
Dr. Sheetal Jain
included in the hands of the sellers would cause Founder & CEO, Luxe
grave hardship to the sellers, without giving them Analytics

an opportunity to reconcile the difference. Sellers

would be vary of transacting through ecommerce Impact of COVID-
19 on online
merely on account of any mismatch arising even shopping in India
out of an error occurring through the ecommerce Dr. Deepak Halan
Associate Professor,
operator as well. School of Management
Sciences, Apeejay Stya
University
Undoubtedly GST is the much awaited indirect tax
reform in India, however, the Model GST law View More 
seems to suggest that this would bring in hectic
times for the businesses, specially, the e-commerce
sector.

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4/10/2020 Impact of GST on E-commerce sector - Re-Tales by Kunal Wadhwa | ET Retail

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Will India's retail industry survive

the COVID-19 lockdown?
The losses for the retail industry alone have crossed $30 billion in the fortnight,
and the number is only rising. Given the current scenario, the industry will take
at least 6 months to get back on track in terms of cash inflows; but how many
companies can actually survive this downfall for the next 6 months?

Sanjay Vakharia Apr 06, 2020, 02.15 PM IST

Sanjay Vakharia
CEO, Spykar Lifestyle

 Click Here to Read This Story

Covid-19: Opportunities in crisis

for Indian luxury market
According to the recent report by Bain & Company, global luxury sales could
drop up to 35% by the end of 2020. With the key luxury markets across the globe
now affected, the pandemic poses serious threat to the sector.

Dr. Sheetal Jain Mar 31, 2020, 12.35 PM IST

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4/10/2020 Impact of GST on E-commerce sector - Re-Tales by Kunal Wadhwa | ET Retail
Dr. Sheetal Jain
Founder & CEO, Luxe Analytics

 Click Here to Read This Story

Impact of COVID-19 on online

shopping in India
Amazon – one of the leading ecommerce players in the country, and the world,
has announced on its site that the customers are relying on them like never
before in their social distancing and self-quarantine efforts.

Dr. Deepak Halan Mar 25, 2020, 01.08 PM IST

Dr. Deepak Halan

Associate Professor, School of Management Sciences, Apeejay Stya University

 Click Here to Read This Story

The instant generation &

changing trends
Are Brands losing relevance and becoming more commodity? Are Advertising
and Creative geniuses losing sheen unable to cope with the Instant Generation?
Is there an air of indifference among discerning consumers that they’re not
being taken care of by the brands they love and are being loyal to?

Shriram Sanjeevi Mar 14, 2020, 12.11 PM IST

Shriram Sanjeevi
Vice President, Levista Coffee

 Click Here to Read This Story

https://retail.economictimes.indiatimes.com/re-tales/impact-of-gst-on-e-commerce-sector/1771 5/10
4/10/2020 Impact of GST on E-commerce sector - Re-Tales by Kunal Wadhwa | ET Retail

Luxury brand's tryst with online

retail
The evolvement of millennial customer is demonstrating their inclination
towards purchasing online, even when it comes to luxury brands. The
transformation has come in terms of customer’s shopping behaviour as they
now are equally comfortable in shopping online as they were while shopping in
a store environment.

Berry Singh Feb 24, 2020, 12.18 PM IST

Berry Singh
Co-founder & COO, Ace Turtle

 Click Here to Read This Story

The journey of deals and

discounts
Things in the world of discounts, deals and offers got truly interesting after the
advent of the internet as eCommerce boomed. Nearly all big players have now
either built their own eCommerce website or are selling their products/services
on popular eCommerce platforms.

Rohan Bhargava Feb 13, 2020, 03.51 PM IST

Rohan Bhargava
Co-founder, Cashkaro.com

 Click Here to Read This Story

Traffic Congestion - The Retail

Opportunity
Thanks to an insanely high amount of time spent inside Cars (mostly), E-
commerce gains the most in my opinion. From ordering Books to Pantry items,

https://retail.economictimes.indiatimes.com/re-tales/impact-of-gst-on-e-commerce-sector/1771 6/10
4/10/2020 Impact of GST on E-commerce sector - Re-Tales by Kunal Wadhwa | ET Retail

Electronic Gadgets to reading on Magzter or Kindle, all forms of E-Commerce

products and services have huge potential (And is clearly displayed with the
number of deliveries made by E-Commerce companies daily in the city).

Shriram Sanjeevi Feb 10, 2020, 03.12 PM IST

Shriram Sanjeevi
Vice President, Levista Coffee

 Click Here to Read This Story

Budget 2020 : Promoting

entrepreneurship and augmenting
consumer spending is key!
The FM’s acknowledgement in the budget of “data is the new oil” reiterates the
focus on the digital ecosystem which would be crucial for the retail sector which
is increasingly relying on digital platforms & tools to access rural & untapped
markets. The budget again provides for expansion of digital infrastructure
through “BharatNet” and is proposing a policy for private sector to develop
“data parks”.

Harsha Razdan Feb 05, 2020, 12.50 PM IST

Harsha Razdan
Partner and Head, Consumer Markets, KPMG India

 Click Here to Read This Story

Budget 2020: Priority should be

on facilitating ease of doing
business
While there has been an upward trend in terms of the growth that the start-up
ecosystem has witnessed in India, there is no doubt about some larger

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4/10/2020 Impact of GST on E-commerce sector - Re-Tales by Kunal Wadhwa | ET Retail

concerns such as crunch in the working capital and the easy flow of investor
money impacting the growth of the sector.

Nitin Chhabra Jan 27, 2020, 04.48 PM IST

Nitin Chhabra
CEO and Cofounder, Ace Turtle

 Click Here to Read This Story

Budget 2020: Expectations for

retailers
While reduction in corporate tax rates and incentives to MSMEs is expected to
go a long way in boosting investor’s confidence, such measures being mid to
long term, are estimated to take some time to result in their intended benefits.
The expectation of the industry, therefore, is that the primary focus of this year’s
budget should be on policy measures to give an immediate stimulus to boost
consumption.

Rajat Wahi Jan 23, 2020, 01.47 PM IST

Rajat Wahi
Partner, Deloitte India

 Click Here to Read This Story

Budget 2020: An opportunity to

bolster consumption through
rural investments
India Inc witnessed a myriad of changes last year and is now looking forward to
a huge opportunity for consumer growth across urban and rural India. Keeping
this in mind, the budget is expected to focus on stimulating growth by providing
disposable income in the hands of the consumer and augmenting public
spending while maintaining fiscal discipline. Here are some of the key points
that we could expect that impact the retail segment in particular.
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4/10/2020 Impact of GST on E-commerce sector - Re-Tales by Kunal Wadhwa | ET Retail

Harsha Razdan Jan 21, 2020, 11.25 AM IST

Harsha Razdan
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 Click Here to Read This Story

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