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Our Latest Article : You Can't Afford To Miss

Hey Online Shoppers, GST Could Be Bad News For Your Retail Therapy

2 min read
Date :30-Jun-2017
The Quint

E-commerce companies – and so online shoppers – got a breather just before the big Goods and Services (GST) rollout on 1 July when the government deferred provisions relating to the collection of taxes at source on online purchases.

Basically, suppliers of e-commerce companies do not have to register under GST immediately. But that is going to happen eventually, and thus, prepare to feel the impact on your retail therapy!

There’s a lot of confusion around what is India’s biggest tax reform ever, but let’s cut to the chase and talk about how your online shopping experience is set to change. Prepare for some bad news (and some good)!

Confused? Here's What It Means

As of now, e-commerce websites do not collect tax. But under the new regime, when the website pays the sellers listed on their site, they’ll have to collect tax at a fixed rate of 1 percent. This is likely to translate into the final prices, making online shopping more expensive than before. But it will happen right at the government’s cue.

But why must we bid adieu to our discounts, you ask?

This is because these discounts will mean additional taxes for the websites, and who isn’t looking for ways out of paying tax?

Okay... But Why Can't I Return or Cancel My Order?

Online websites also won’t be too thrilled about allowing returns and cancellations. While the companies have a return or cancellation rate of about 18 percent, after GST, the companies will have to pay the tax amount on their own while collecting tax at source in case of returns and cancellations.

To avoid a cash crunch, e-commerce companies are likely to be stingy with their return and cancellation policies.

But fret not, your (slightly more expensive) orders, will now arrive sooner because with GST’s uniform taxation, the items will not have to be taxed multiple times. So there is reason to celebrate still!


The Quint

The Quint is media with intelligence. The Quint is media for mobile consumption – quickly, visually and socially. The Quint is popular, digital journalism.

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