SUMMARY
The deadline had been deferred many times since July 2017
Ecommerce companies have been asked to deposit tax collected in October by November 10
The companies who have missed the deadline may face an 18% interest the tax amount
Ecommerce companies may face penalties for missing a November 10 deadline to deposit tax deducted at source (TCS) on payments made to their sellers. However, according to reports, several companies have blamed this on difficulties in registering for TCS in some states.
Global ecommerce company Amazon has reportedly informed its sellers that it was unable to implement TCS for October, the season for various festive season sales, in 12 states due to “technical issues”.
An Amazon executive informed sellers on Saturday through their Facebook group that due to “technical issues” the company was not able to report TCS in Gujarat, Punjab, Goa, Bihar, Chandigarh, Chhattisgarh, Meghalaya, Assam, Himachal Pradesh, Jammu and Kashmir, Andaman and Nicobar, and Lakshadweep.
Several state governments have demanded that ecommerce companies have an office and physical address in the state to be able to register themselves for depositing taxes deducted from their vendors. Following protests by ecommerce companies, the Union government had stepped in and clarified that ecommerce companies can register with their head office address and are not required to have an office in each state.
Amazon informed sellers that it was “working with the (Goods and Services Tax) authorities” to resolve the technical issues.
For the uninitiated, the deadline for TCS provisions, introduced as a part of Section 52 of the Central Goods and Services Tax Act, has been deferred many times since July 2017 and was finally set to be implemented from October 1, 2018. Ecommerce companies had to deposit a taxes collected from their sellers for the month of October by November 10.
According to the anti-tax avoidance measure, ecommerce companies will have to deduct tax at the rate of 1% (CGST)+1% (SGST) before making the payment to the supplier for proceeds of a sale, as per the provisions of the act.
The Internet and Mobile Association of India (IAMAI) had earlier raised objections against the move, calling the tax an “unfair liability” imposed on the sector.
[The development was reported by ET.]
