Tax Specialist

We can take numerous illustration to prove dependency and commonly adaptation of digitization as a basic tool used by every sector of any nation for their growth and now, let’s take the example of the government sector. Governments are also monetizing APIs through different ways, whose purpose is not to just limited the utilities but sharing the information in a secured and useful way such as providing citizen information to banks and financial institutions, travel agencies, law enforcement agencies, visa verification agencies, etc. Hence, governments can not only offer citizen services through mobile apps but also can use the citizen data for other value added services by comply with several private enterprises or government agencies.

Now we can take the example of banks, Such as micro insurance can be a good participation opportunity between the banks and Telco’s. As we know Mobile Money provides a fully integrated system for users to make payment and transfer money in a very simple and convenient way therefore mobile money is also a good example of such partnerships. In India, Pay-TM may be a distinguished whole and may be an extremely popular digital notecase. Whereas, banks can even provide their own digital wallets because it is often straightforward for the users to control at intervals a known surroundings. And, it is also very easy and simple for the banks to link the bank accounts of every account holder with the digital wallets. Hence, payment mode of different industry brings a huge opportunity and open APIs are the key which are the base for its implementation. As every person knows that hospitality industry can tie-up with banks to supply tailored vacation packages and this may be managed through different integrated APIs.

Therefore, everyone must have to consider about finding his consequence value planning, his core proficiency and calibrating it through IT systems which are built on APIs and have to make it open APIs. And when someone say “Open API,” it means that the third party developer or organization or an individual can login to your developer portal, distinguish your APIs, sign up to it and use them without any human interference. Google, Twitter and Facebook are the initiator in the Open API world. Today, everyone can find developer.twitter.com on internet after searching on any search engine and can request there for a trial developer key and build their own app without any heavily charged as you have to need to pay them little only at the time of going live. On the internet world there are so many framework to do this. Which is the second part of the process; but, now the approach of APIs is following the self-service model and that’s the model we all have need to think about.

There is still a topic for discuss, We can still share and discuss few more examples from energy management and manufacturing sectors and can also discuss how APIs built on your IT backbone can open new revenue potential for you. Wait and put patience time will come.

Impact of GST on e-commerce

by

Rupal Agarwal

Let us look at some of the crucial features and implications of GST affecting the e-commerce sector.

Introduction of TCS (Tax Collected at Source)

With the rolling out of GST, e-commerce retailers will have to collect a TCS at the rate of 2% per transaction from the payments to be made to the vendors and suppliers of goods sold to customers. The TCS will not be applicable to aggregators like OLA, Uber, and MakeMyTrip etc. TCS will also not be applicable on goods which are returned by customers as there is no sale. Implementation of TCS will have implications for both the e-commerce entities and their suppliers.

1. Additional compliance

With TCS, now e-commerce entities will have to furnish returns and details (on a monthly basis) of all the TCS collected from the suppliers by the 10th of next month. This has to be done in the prescribed formats within the prescribed deadline. For example, the amount of TCS collected during the month of August will necessitate that the returns for the same be filed by 10th September. Similarly, the suppliers will also have to furnish their TCS details. Eventually, records received from both the parties will be reconciled by the tax authorities.

2. Working capital factor

Small scale vendors are allaying fears that with TCS in effect, a substantial amount of working capital would get blocked for a period of 20-50 days which could affect the inventory levels maintained by them and their spending on revenue expenditure.

3. No impact on price

TCS will have no effect on the price of the goods sold because suppliers can offset this TCS deducted by the e-commerce entities against the tax payable by suppliers in the form of tax credit.

Compulsory registration

Now, every supplier or vendor of goods operating via the e-commerce route will have to compulsorily register with concerned authorities. The minimum threshold limit will not be applicable in this case.

There could be perceptive barriers about this registration process but it appears to have many long term benefits. It gives the small and medium businesses an opportunity to be a part of the rapidly growing organized retail sector and make their existence matter in policy-making (to avail tax benefits, credit schemes etc).

Standardization of taxes

In the present indirect tax regime, the VAT charged on same goods varies from state to state. Similarly, the octroi tax rates also vary. The resultant effect is disparities in the price of the same goods across the country. GST aims to do away with these variations by adopting a One India One Tax policy. GST aims to address these inter-state variations in the state level taxes (as there will be a standard taxation structure for indirect taxes). This would remove or at least narrow down the disparities in the selling prices of same goods across the country.

Interstate movement of goods

Currently, the goods passing from one state to another are subject to several taxes like octroi, CST, VAT etc. The procedural bottlenecks make it a difficult experience for suppliers and e-commerce companies to procure goods from another state or cater to markets outside the home state. With the proposed new system, as various existing indirect taxes are integrated into one taxing structure, the inter-state movement of goods is expected to improve to a considerable extent.

Increased competition

The e-commerce companies are not the only ones to benefit from the improved facilitation of inter-state movement of goods. The physical store retailers would too benefit from it. With GST in place, it is expected that inter-state procurement of goods will see a rise and retailers will aim to capitalize on newer markets outside their home state. The reduced tax burden (because of GST) will also enable the retailers to compete more fiercely with the e-commerce companies in terms of the product line and product pricing, especially in the local markets.

Discounts

In the present system, there are some ambiguities regarding the taxation of the discounts offered by the e-commerce companies. The GST will be applicable on the transaction value and any discount offered will have to be explicitly mentioned in the invoice. However, if the discount is offered after the sale or is not explicit, it will be subject to GST.

On a concluding note, GST seeks to overhaul the existing indirect tax regime and replace it with an integrated version towards a One India One Tax system. It will also bring more clarity and transparency in the applicability of rules and regulations pertaining to indirect taxes in India.

It looks as if the e-commerce sector will undergo a phase of change as GST seeks to streamline the taxation structure. The TCS part might be considered for a revision which we will have to wait and watch in the coming weeks.

YRC is a Management Consulting Company, especially for the B-C Sector.Our expertise lies into designing of

Standard Operating Procedures (SOPs)

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& Training.We help companies to organize their operations and expand through best management practices.

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