Mumbai, May 12, 2016: With the Goods and Services Tax (GST) potentially around the corner, PwC India and Internet And Mobile Association of India (IAMAI) released a joint report today, on the Impact of GST on Online Marketplaces. The report provides an overview of the conditions under the existing indirect tax regime and attempts to identify the key factors that might prove to be important for online marketplaces under the proposed GST regime.
Online marketplaces are on the rise and companies like Flipkart, Snapdeal, Amazon and others are the flag-bearers of e-commerce in India and are responsible for converting millions of Indians into online shoppers. The complex and ever-evolving ecosystem of online marketplaces, involving multiple parties and transactions across nations, is giving rise to a plethora of international and India tax and regulatory issues. Since the introduction of the GST regime will affect the very fundamentals of how business is carried out in India, it is essential to reflect upon the impact on online marketplaces.
Areas of improvement identified in the IAMAI-PwC Report:
Commenting on the issue, Sandeep Ladda, Partner & Leader – Technology & E-commerce, PwC India said, “The proposed GST is perceived as the single biggest indirect tax reform in India and is expected to bring in a simpler tax structure with a seamless credit chain. The ‘one tax, one market’ concept on which GST is based should be a welcome step for online marketplaces. To create clarity in terms of the tax treatment of online marketplace sector transactions, sector-specific provisions need to be introduced in the GST regime. The companies will have to follow the ‘whole of business’ approach for GST impact assessment and implementation, where tax and business advisory teams work together to provide a seamless service to clients that covers all necessary business aspects. Only then will the sector be able to utilise its potential in this market.”
Key recommendations made in the IAMAI-PwC Report:
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