Why Flipkart, Amazon and Snapdeal are opposing GST ?

While these top e-commerce compete each other in markets, there is this one cause which made them

all come together and raise their concern.  As the government readies to implement goods and services tax (GST) from 1st July, Flipkart, Snapdeal and Amazon came together to raise concerns about the tax collection at source clause under draft model GST law.

This combined opposition to existing GST regulations came from Amit Agarwal, who is heading Amazon India, Sachin Bansal, Flipkart’s co-founder and Kunal Bahl, Snapdeal’s CEO and co-founder, during a press conference conducted by The Federation of Indian Chambers of Commerce and Industry (FICCI).

The key contention here is tax collection at source (TCS), which GST has made mandatory for all e-commerce portals. The issue with this move is that TCS has to be collected by e-commerce portals themselves and not Government, and this is not acceptable by these online majors.

There are more than thousands of vendors and sellers on each of these platforms, and their count is increasing every single day. E-commerce portals will be required to spend an insane amount of money, time and resources to monitor the TCS for each of their sellers. This additional burden will reduce their profits and will slow them down.

As per these companies, the TCS clause would lead to a capital lock-down of about Rs 400 crore per annum and also discourage merchants from selling online. It could result in a loss of an estimated 1.8 lakh jobs, putting a halt to the growth and investments in the sector.

Please free to share your view on this tax collection at source (TCS) aspect of the Law.