News: Govt. offers temporary tax relief to e-commerce sector under GST

Compensation & Benefits

Govt. offers temporary tax relief to e-commerce sector under GST

The move is to ensure smooth transition to GST. Govt. defers deduction of tax on payments made to vendors and collection of TDS/TCS
Govt. offers temporary tax relief to e-commerce sector under GST

A temporary relief is given to e-commerce companies such as Amazon and Flipkart on deduction of tax on payments made to vendors, which was supposed to be levied from July 1 under GST system, but now it is deferred for some time. 

Another relief is offered to small traders who are selling through these e-commerce platforms that they need not register themselves immediately. These issues have been addressed after e-commerce players made representation to the government bringing to the forefront the complications associated with the implementation of GST. 

In addition, the government has also deferred collection of TDS (tax deducted at source) or TCS at 1% on payments in excess of 2.5 lakhs made to the supplier of goods and services.  It was so notified under Central GST and State GST to certain entities. 

After the passing of historic GST legislation, the eyes are all set on its implementation and its trickling impact on all sectors. For corporates, People Matters reported that - GST will be applicable on all amenities outside CTC (cost to company). 

As per the new GST bill, if an employee receives free goods and services beyond its stipulated sum then GST would be applied. Also, if any employee uses company’s asset for personal use, then also GST would be mounted on it. As CTC structure differs in companies, broadly all free luncheons, scholarships to employees’ children, the car drops other such services will fall under this purview. 

In addition, input tax credit will not be available on the supply of several facilities including life and health insurance to employees. There is a negation of input tax credit on free and subsidized food and beverages on at workplace, cab facilities, club and fitness memberships etc. Only those services which an employer is mandated to provide under the law to employees, as notified by the government, will not be denied input tax credit.


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Topics: Compensation & Benefits, C-Suite

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