Ecommerce giants, Flipkart, Amazon India, and Snapdeal have collectively opposed tax collection at source (TCS). TCS is the income tax collected by the seller in India from a payer on the sale of certain items – which is proposed under the model Goods and Services Tax (GST) law. The provision is expected to take effect on July 1, 2017, along with the national rollout of GST.
If this tax regulation is implemented, then ecommerce companies will have to withhold the tax payable by the sellers on every transaction and deposit it with the government on their behalf. This step will force ecommerce biggies to move offline as it will block their working capital for sellers.
“We are estimating that close to $59.8 Mn (INR 400 Cr) per annum of capital will be locked in the system, which will not be accessible to sellers and straight away eat into their working capital,” said Sachin Bansal, co-founder of Flipkart, during the Federation of Indian Chambers of Commerce & Industry (FICCI) press conference.
Earlier in Feburary 2017, Sachin highlighted the rise of selective globalisation while addressing the gathering at the IAMAI India Digital Summit. According to Sachin, India needs to provide a level field for homegrown companies so that they can scale up and are not killed by foreign competitors like Alibaba and Amazon.
“Another big thing that is happening across the world is the rise of anti-globalisation… it was all the time in China and US, selective globalisation, rather. I meant there should be a level playing field,” quoted Sachin.
This is not the first time Sachin has highlighted such issues. In December 2016, Sachin along with Bhavish Aggarwal, founder of Ola, urged the government to design policies for Indian companies so that will help them fight against the foreign players.
Apart from this argument, other comments suggested that if power rested in the hands of local players then high-value jobs, security, data, and privacy will all be under Indian control.
Not only this, in October 2016, Sachin revealed his intentions to create a lobby group for local consumer Internet startups so that he can form a trade association that will solely fight for local companies.
(This development by reported by Mint)
