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.

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Posted on by Gunjan Bagla
Gunjan Bagla
California-based management consultant Gunjan Bagla runs Amritt, a consulting firm helping American companies to succeed in India. Amritt is the trusted advisor for India market research, India business development, India market entry, Global Engineering, Global Technology Scouting, India R&D and Open Innovation. Gunjan is author of "Business in 21st Century India: How to Profit Today from Tomorrow’s Most Exciting Market" (Hachette Book Group, 2008), Amazon's top rated title on the subject. He has appeared as the India Expert on BBC Television, Bloomberg TV, Fox Cable Business and has been quoted in the New York Times, the Los Angeles Times, the Hollywood Reporter and Business Week for his expertise on India.


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