GST impact on ecommerce:
Amazon India has got a relief from its three-year-old tax litigation with the Karnataka government. With the onset of the goods and services tax (GST), the Karnataka commercial tax department said that the dispute with Amazon India is over, and there are no differences as far as the interpretation of law is concerned. The development will now allow Amazon India to accept taxable goods from Karnataka-based sellers for its “Fulfilment by Amazon” (FBA) service. The vexed dispute coming under the ambit of the earlier VAT regime forced many online sellers from Bengaluru to take a circuitous route to fulfil their sale transactions by FBA. Speaking to FE, Ritvik Ranjanam Pandey, commissioner, Karnataka commercial tax department, said, “Now that GST has come, it (litigation with Amazon) will get resolved completely. Now there is no dispute as far as inferring the law is concerned. Ecommerce companies generally deal with goods.” Pandey added, “But now the law is very clear. It says that e-commerce companies will deduct 1% tax and pay it to the government. Of the 1%, SGST and CGST will have a 0.5% component, respectively.” “Whether they (e-commerce companies) are providing goods or service, it doesn’t matter — all they have to do is deduct 1% and
give it to the government,� Pandey went on to say. An email sent to Amazon India seeking its response to this development remained unanswered.