GST crucial for growth of online marketplaces: IAMAI

February 24, 2016 10:31 pm | Updated 10:31 pm IST - NEW DELHI

With Goods and Services Tax (GST) Bill stuck in Parliament, Internet and Mobile Association of India on Wednesday said the crucial Bill once passed will not only simply tax rules for online marketplaces, but make movement of goods across states a lot easier, thus benefiting sellers as well as consumers.

“It is crucial that the GST Bill is passed in the Budget Session. This will bring huge benefits to the SMEs and e-commerce companies. The extant tax structure of India is heavily fragmented with multiple indirect taxes levied by different authorities at different stages of a transaction,” IAMAI President Subho Ray said.

He added that the Bill, which subsumes all indirect taxes to create one rate and integrate the country into a single market, is important for the success of mega economic and social projects, especially Digital India and Start-up India.

Currently, different procedures and rates of VAT and other forms of Local Body Taxs prevail across various states. “This has created logistical challenges for the industry, besides giving rise to compliance related complications. Conflict of interests between tax authorities in case of inter-state transaction is a major pain point for us,” Paytm founder Vijay Shekhar Sharma said.

 Mr. Ray cited the examples of states like Uttarakhand, Kerala and Karnataka that charge a tax on online purchases ranging up to 10 per cent.

 “This often affects deliveries to these states and also, higher costs for consumers if the tax is passed on. Bringing GST will take away this multiplicity of taxes and boost e-commerce in the country,” he added.

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