Goods and Services Tax (GST) is proposed to be a consumption based unified tax which would be levied on both goods as well as services. GST proposes to subsume most of the current indirect taxes like excise duty, service tax, VAT, etc. and a single tax would be levied called GST. GST is expected to possibly eliminate, simplify and streamline multiple indirect tax regimes in India. GST is a single comprehensive tax that will be applicable across all States in India, hence, e-Commerce companies will not have to struggle with the complex regulatory structure. Moreover, sourcing, distribution and warehousing strategies that are currently designed by companies from the perspective of minimizing the tax liability, will undergo a change. Going by this, it is expected that the e-Commerce companies stand to gain tremendously from GST. Presently, the Constitutional Amendment Bill is passed by the Lower House of the Parliament and it is placed before the Upper House in order to empower Centre/ State Governments to roll out the GST law.
GST expected to enhance the growth of e-Commerce: GST will enforce a single comprehensive indirect tax regime that will be applicable across all states on the supply of goods and services. The implementation of GST is expected to subsume the central excise duty, service tax and additional customs duty at the central level and VAT, CST, Entry Tax etc. at the state level. GST will enhance the operational efficiency of the e-Commerce industry in the enumerated ways: • Transparency and simplification of taxes across the borders in India • Elimination of the incidence of double-taxation and improvement in the efficiency of supply chain • Logistics service providers can leverage seamless hub-and-spoke models for delivery resulting in lower costs and fewer bottlenecks. Warehouses can be set-up keeping in mind business objectives rather than for reduction in incidence of tax