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E-commerce has become the order of the day, and this has not become so in a day or two. Nowadays, people have money but they don’t have time to go to malls or any such marketing hub for shopping or even for window shopping. E-commerce or online shopping facilitates you to swap through products or services, adding them to one’s cart and shop as per your convenience.
Not only this, it also gives you the facility to pay on delivery of a product or service, if any. More so, you can ask for a replacement, if the product delivered is not up to the mark or what you wanted it to be.
All this has happened because in the last one and a half decade or more precisely one decade, e-commerce or online business has seen an unprecedented growth and India is pegged as the second largest market for e-commerce. Business analysts say that the e-commerce market in the country is expected to break the $100 billion mark by 2020.
But all that has given rise to many challenges including that of multiple tax issues cut-throat competition, day-to-day declining profit margins etc. The online marketplace and their owners are also facing litigation owing to their innovative business models.
While the proposed Goods and Services Tax (GST) is surely going to bring about much-required standardization in the commerce landscape in line with the motto of ‘one nation, one tax’, there are several aspects that will change how businesses operate.
Post the implementation of GST, there will be standard tax rates for each product and tax arbitrage will not be possible thus bringing online sellers (e-tailers) and offline sellers (retailers/whole sellers) to the same level in terms of costing and pricing.
The unwanted competition will also be minimized as unregistered merchants will be weeded out of e-commerce space. As per the norms, GST registration is mandatory where turnover is Rs 20 lakh or more, and if a trader wishes to sell through online portals he/she needs to get registered irrespective of turnover.