The Goods and Services Tax will be rolled out by 1st July 2017 and it is expected to affect product pricing, sourcing, distribution and other business related aspects. If you are not ready for GST it’s time you prepared. Indian Online Seller (IOS) put together a GST preparation guide to help you ready yourself for this new tax.
If you sell on an online marketplace the biggest preparations need come from the online marketplace’s side. To prepare for the changes GST will brings, Flipkart introduced the GST Genie programme.
The vice president and head of Flipkart’s marketplace, Anil Goteti said that the company has been planning for several months to prepare for GST.
He stated, “We are taking it very, very seriously and are putting all the pieces together so that the sellers and other stakeholders have it very easy when the GST sets in”
What kind of wishes will the GST Genie fulfil?
The main idea behind this programme is to help online sellers comply with GST once it’s implemented. It has a network of charted accountants and platforms like ClearTax and Tally for its 1.2 lakh online sellers.
Goteti said, “The partners for this platform are figuring out issues around filing taxes and solve it with the sellers. As of now the services are free. We have been planning meticulously over the last few months to be GST-ready by the earlier deadline of April 1. We will provide our sellers technology solutions for ease of compliance.”
The etailer will be offering:
- Classroom training
- Explanatory videos
Sellers can access these and use them to train their finance teams, so they know exactly how to comply with GST on the platform.
Overall taxes will be different under GST based on the rates fixed by the GST Council. For example, taxes on apparel will be very different from taxes on electronics. The invoices for the same must be prepared accordingly.
Goteti also mentioned, “We are encouraging our merchants to get their businesses registered for GST. As a seller has multiple product categories listed with us, they have to find a harmonised system number to match the description on the government side and deciding on the tax structure accordingly. We will give them tools on doing this seamlessly and help them on customer invoicing as well.”
Sellers will have access to offline contact centres in about 50 to 75 areas in the country for help regarding GST. Kiosks and cafes are also being used to address issues or questions sellers may have about GST.
All these help systems are being tested out by government agencies to ensure they work in accordance with prescribed requirements. Goteti said there will be benefits for online sellers and buyers over time. If prices do not come down across the value chin and the rates are still high, seller are free to decide the prices accordingly. At the same time he pointed out that cost pressures may occur during the initial stages, but later on benefits will arise. That’s not all, when GST is implemented there will be a certain amount of revenue withheld that will eventually be paid to the sellers.
The new taxation structure is not expected to affect the sourcing of goods from foreign countries. It is however expected to increase delivery speed across states.