Flipkart, Amazon, Snapdeal say TCS provision in GST will hit their growth

In the proposed model of TCS will lead to greater complexity in business operations and block capital

Flipkart, Amazon, Snapdeal say TCS provision in GST will hit their growth

The heads of e-commerce giants including Amazon, Flipkart, and Snapdeal on Thursday expressed their unhappiness over the TCS (Tax Collection at Source) provision of the GST (Goods and Services Tax) at a press conference organised by FICCI. Under this new provision, online market platforms are responsible for collecting - and paying - taxes on behalf of their sellers. The three companies are totally against this provision which they fear will hamper the business.


The e-commerce sites share data on sales periodically to the government to ensure tax compliance. In the proposed model of TCS will lead to greater complexity in business operations and block capital, the firms argued.

Snapdeal co-founder and CEO Kunal Bahl started the conference and stated "e-commerce is vociferously for GST." Amazon India head Amita Agarwal also supported this and added that the new provision can change the trajectory of growth for e-commerce. "Tax collection at source is an exception created for online, it isn't there for offline," he added.

Flipkart co-founder Sachin Bansal said, "none of us is saying that GST is bad, it is a transformative step for e-commerce," but added, "tax collection at source is an area of concern in GST for e-commerce."

"Due to TCS, close to RS. 400 crores per annum of capital will be locked into the system," he also said. "It will hamper working capital."

Stating there are thousands of sellers and merchants on each sites, the firms say TCS will be cumbersome and time-consuming and it will discourage sellers. "Success of e-commerce industry is contingent upon the success of small businesses,"
NDTV 
quoted Bahl as saying.

They also said a close examination of the impact this tax provision might make has not been carried out. FICCI Secretary General Dr A Didar Singh said that, "e-commerce created the first national market of the country, GST just enhances that."

Meanwhile, Finance Minister Arun Jaitley said Lok Sabha that with GST implemented, the country would have a better and efficient tax system.