Even as the government battles to keep the April 1, 2017 deadline for rolling out the GST (goods and services tax) regime, trade and industrial bodies have started making a strong pitch for low rates and exemptions.
The fast expanding e-commerce companies are making a strong case for getting exempted from GST. They have put forth the argument that they provide a ‘platform’ to vendors and customers for products and do not make money out of sales made. Companies like Amazon India, Flipkart, and Snapdeal in their representations have said that they are mere ‘service providers’ to the vendors, and liable to pay GST only on income generated on service. They have reasoned that
they earn their revenue from advertisements, and the GST should be applicable only on vendors selling products via the portals.
The companies, at a meeting convened by the empowered committee, made a strong pitch for exemption, claiming the sector is creating huge job opportunities and allowing small industries to sell their products. However, the empowered committee’s assessment is that the e-commerce sector is generating millions of dollars but pays practically no taxes. While consumer pays VAT and producers pay excise duty, these companies go untaxed as the transaction is considered just a pass-through.