1 Comment

  1. Draft GST Law

    NDA government has just released , DRAFT GST LAW , for consultations among stake-holders
    In the matter of ” E-Commerce transactions ” , the draft proposes :
    “….. a tax collection at source for E-Commerce companies ”

    MINT ( 15 June 2016 ) interprets this as follows :
    ” This means that any payment made to a supplier by an E-Commerce company will be subject to tax collected at source ”
    In the matter of ” Intangible and Works Contract to be classified as Services ” , it says :
    ” The law classifies intangibles such as software and works contract as Services ”

    MY TAKE :

    A Commerce by any other name ( including ” E Commerce ” ) , is still sale of ” Goods / Services ” by a Seller , in exchange of ” Value ” , ( usually money – when that exchange is not a Barter Deal ) , received from the Buyer

    E – Commerce ” is nothing more than ” Commerce ” , where such exchange of values , take place electronically , as opposed to physically . It still remains Commerce , even when perceptions differ

    Hence , regulations / controls / taxation etc that govern E-Commerce should , essentially remain the same as in case of Commerce

    Mere elimination of an intermediary ( Distributor / Wholesaler / Dealer / Agent / Stockist etc ) , from the ” Supply Chain ” , itself cannot be the determining criteria

    Take a look at the various parameters of ” Commerce ” outlined in my following blog of 15 Sept 2015 :
    ——————————————————————————————————————————–

    Not an easy task to define what is E Commerce ( and what is not ), considering all the possible permutations / combinations ( running into LAKHS of them ! ) , of the following elements :

    # NATURE

    * A physical ” Product ” ( Capital Goods / FMCG / Consumables / Perishables )

    * A virtual ” Service ” ( Medical advice / Legal advice / Consultancy / Software etc )

    # GEOGRAPHIC SPREAD

    * Across National boundaries ( International Trade )

    * Across State boundaries ( within India )

    * Across Municipal boundaries (within a State )

    # SUPPLY- CHAIN / INTERMEDIARIES

    * Mfr > Distributor > Dealer > Retailer > Buyer

    * Mfr > Buyer

    * Any disintermediation in the above chain

    # ORDER PLACEMENT / ACCEPTANCE

    * In a physical location ( Shop / Store / Office / Factory / Home )

    * In a virtual location (Web site/Mobile App/SMS/ Email / Phone / Video Conference )

    # DELIVERY

    * Physically in a Shop / Store etc where Buyer collects / picks-up from shelf

    * Delivered to Buyer’s location, thru Delivery Boy

    * Delivered to Buyer’s location, using a Drone

    * Delivered to Buyer on his home-based 3D Printing Machine ( using internet )

    # PAYMENT

    * Cash against delivery

    * Pre-paid / Post-paid Cheque

    * Credit / Debit Cards across counter

    * Credit / Debit Cards thru online Payment Gateways

    * Through Mobile Wallets

    * Electronic Bank Transfer

    * Using Virtual Currency like Bit-Coins

    * Barter of Goods or Services

    # FOREIGN INVESTMENTS

    * FDI in Manufacturing / Supply Chain / Payment Gateways – Apps- Mobile Wallets

    * FDI in Web sites like Amazon – Flipkart – Alibaba – Snapdeal etc ( What percentage ? )

    Can you think of any other ” Elements ” that I have forgotten ?

    In any case , given the fact that there can be lakhs ( if not millions ) of permutations / combinations of the above-mentioned elements , one must not attempt to define what is E Commerce ( and what is not ) , by inclusion or exclusion of these elements in definition

    Such a complex definition would lead to thousands of court cases involving Governments and each court interpreting the definition , differently !

    The only definition that would satisfy ALL of these permutations / combinations , is :

    Any exchange of ” Value ” between any number of parties , involving ,

    > Goods or Services , on the part of one party

    with,

    > Money or its equivalent consideration , on the part of a second party

    with or without using,

    > Intermediary services , on the parts of any other parties

    ——————————————————————————————————————————–

    I hope the ” DRAFT GST LAW ” refrains from defining ” E Commerce ” separately – and as distinct from plain vanilla commerce
    GST Law must adopt a BROAD / ALL-ENCOMPASSING , definition of ” Commerce ”
    ——————————————————————————————————————————–
    17 June 2016
    http://www.hemenparekh.in / blogs
    ——————————————————————————————————————————–
    Make Yourself Heard

    Dear Visitor :

    It is time for YOU to speak up – and demand that YOU are heard

    By emailing this suggestion – incorporating your OWN improvements – to the following Policy Makers

    ( Just multiple copy all the following Email IDs into the Recipient column of your Outlook and Copy / paste this suggestion in the Message Box ) :

    narendramodi1234@gmail.com; 38ashokroad@gmail.com;ajaitley@del5.vsnl.net.in; jayant.sinha19@sansad.nic.in;piyush.goyal@gov.in;nitin.gadkari@nic.in; spprabhu1@rediffmail.com;bandaru@sansad.nic.in;smritizirani@nic.in;nsitharaman@nic.in; ravis@sansad.nic.in;sureshprabhu@irctc.co.in;prakash.j@sansad.nic.in;secy-ipp@nic.in; amitabh.kant@nic.in; shaktikanta.das@nic.in; rsecy@nic.in; adhia1981@gmail.com; ceo-niti@nic.in; atul-chaturvedi@nic.in; uma.bharati@sansad.nic.in; d.pradhan@sansad.nic.in; rprudy.office@gmail.com; rudypr@rediffmail.com; eam@mea.gov.in; mosvks@mea.gov.in; mvnaidu@sansad.nic.in; mnaqvi@sansad.nic.in; rao.inderjit@sansad.nic.in; mljoffice@gov.in; sadananda.gowda@sansad.nic.in; ministerminority@gov.in; najmah@sansad.nic.in; minister-ca@nic.in; ramvilas.paswan@sansad.nic.in; gandhim@sansad.nic.in; akumar-alpha@sansad.nic.in; jpnadda@sansad.nic.in; hm.moca@nic.in; geete@sansad.nic.in; simratbadal@yahoo.com; ns.tomar@nic.in; rmsingh@sansad.nic.in; tc.gehlot@sansad.nic.in; dr.harshvardhan@sansad.nic.in

Leave a Reply