The unimaginable has happened! Leading online marketplaces (and arch rivals) Amazon, Flipkart, and Snapdeal have joined hands for the greater common good of the ecommerce industry. The three addressed a press conference under the aegis of the Federation of Indian Chambers of Commerce & Industry (FICCI) to protest against tax collected at source (TCS).
Sachin Bansal, co-founder and former CEO of Flipkart explained the companies’ stand,
“None of us is saying GST is bad. It is going to be transformative for India and the e-commerce sector. However, TCS is a serious issue. At current scale, Rs 400 crore of capital per annum will be locked into the system that will not be accessible to sellers and this will eat into their working capital. This will deter them from listing with us.”
Alternative to TCS
The same Bansal, who had spoken out against ‘selective globalisation’ (read Amazon), referred to TCS as an ‘impediment to the industry’. Amit Agarwal, Amazon India’s country head and Kunal Bahl, co-founder and CEO of Snapdeal, with Flipkart’s Bansal agreed to collect data from their sellers and share the same with the authorities to ensure tax compliance. FICCI tweeted the following,
“Tax evasion can be avoided by sharing of information (that we’re already doing with states).”
“It’s upon us to figure out policies that make the flywheel spin faster and still achieve the objective. And, you can achieve that through real time data information sharing,” said Amit Agarwal.
FICCI tweeted Agarwal’s quote,
“Tax collection at source is an exception created for online. (It isn’t for offline).”
Kunal Bahl expressed that TCS would harm progress,
“Ecommerce is the confluence of digital India, Start-up India and Make in India. TCS will be an impediment.”
Bahl also said that it would only create unnecessary confusion,
“The proposal, while adding needless complexity for the sellers, provides no benefit to tax authorities and will lead to duplication of information, followed by need for its reconciliation.”
We sincerely hope the authorities will consider the collective plea, and agree to remove the additional burden of TCS. Stay tuned, we will keep you updated on the topic.