- The Indian e-commerce market has experienced significant growth due to factors such as increased internet penetration, foreign direct investment, technological advancements, and innovative practices.
- This has led to a shift in shopping behavior and supports the government’s initiatives for a cashless digital economy.
- However, challenges have emerged in protecting consumers from unfair trade practices, regulating data collection, fostering healthy competition, and preventing tax evasion.
- The government has implemented various laws and regulations, including the Goods and Services Tax (GST), to address these challenges.
- The GST regulations for e-commerce transactions under the marketplace model can be categorized into two pillars, with specific requirements for electronic commerce operators (ECOs) and suppliers. ECOs are responsible for collecting TCS on taxable supplies facilitated through their platform while concurrently levying GST on platform-related services extended directly to merchants.
- The government has introduced changes to simplify compliance and ensure simultaneous reconciliations.
Source Grant Thornton
