India’s GST Council Caps Tax at Source at 1% for E-Commerce
The Goods and Services Tax (GST) Council has decided “to provide for up to 1 percent Tax Collected at Source” for e-commerce companies, a senior government official explained. The supplier of goods can set off the tax against its final GST liability, and so theoretically, the levy can be even lower than 1 percent. The tax provision will allow authorities to track transactions carried out through e-commerce platforms and ensure compliance.
Morgan Stanley estimates India’s e-commerce market will surge to $119 billion by 2020. The government sees e-commerce as having a huge potential for job creation by providing market access to small entrepreneurs and businesses that would find setting up physical retail establishments too expensive, reports the Economic Times.