On Saturday the Finance Minister Nirmala Sitharaman announced the Union Budget 2020 proposing a new tax to be levied on e-commerce transactions as a means to widen the tax base─ a move which could aggravate the load on sellers on such platforms.
This news has received dual reviews from online sellers. On one side reduction in personal income tax rate has given more money in the pockets of consumers thereby boosting demand while on the other side, 1% TDS provision increase has negatively impacted the working capital. More so, it’s an addition to the TCS (tax collected at source) under GST rule (goods and services tax).
With a foggy clarity on the working of the framework to regulate the E-commerce industry; the national logistics policy coupled with Rs. 6,000 crores for expansion of BharatNet and emphasis on machine learning, robotics, AI and IoT will be instrumental in boosting India’s digital journey which will boost the speed of mobility and improve mid-mile and last-mile delivery, benefiting E-commerce companies.
This move will help entrepreneurs and startups across the country, including tier 2 and tier 3 cities, to scale their online businesses.
As online sellers, we look forward for definite guidelines and clarity on some open debates as mentioned above and are very optimistic about the future of E-commerce in India and its benefits to our country.
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