E-commerce term may be misinterpreted in GST: ASSOCHAM


The scope of the e-commerce definition as given in the Goods and Services dispensation has been left so wide that it could go well beyond the Amazon or Flipkart platforms and may even cover the commodity exchanges, ASSOCHAM has said, seeking clarity from the government so as to remove uncertainty among businesses, as the GST is set for a rollout.

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“The scope of the term ‘electronic commerce’ is very wide and does not restrict itself to cover electronic marketplace service providers like Amazon and Flipkart. It covers all businesses where the supply of goods/services is through a digital or electronic network,” ASSOCHAM said in communications to different concerned ministries.

It said that since the term ‘e-commerce’ covers all businesses where the supply of goods/services is through a digital or electronic network, there is a possibility of “unwarranted interpretations”, which may lead to future and commodity exchanges being treated as electronic commerce operators in respect of commodity derivatives that result in actual delivery of the goods.

“In our opinion, such an interpretation will not be in consonance with the object and intent of special provisions for the electronic commerce business. There are distinguishing legal and operational factors between e-commerce operators and commodity exchanges. The commodities exchanges cannot be treated as electronic commerce operators in their legal capacity as well as in common parlance,” the chamber pointed out.

As the GST is set for a rollout latest by September, and perhaps even as early as July, this year, ASSOCHAM has also sought clarity with regard to the implementation of the most important tax reforms. A great amount of clarity has been sought with regard to the treatment of GST relating to banking, telecom, banking services, exports, gems and jewellery, and MSME sectors, among others.

“ASSOCHAM would like a seamless and flawless rollout of the GST to infuse a sense of confidence among the consumers, trade, and industry. Eventually, the GST should become a showpiece of our reforms,” said chamber Secretary General D.S. Rawat. He added that the chamber is doing its bit to reach out to the stakeholders and is holding a large number of workshops and training seminars for the industry in different parts of the country.

The chamber said that the Central GST is silent on the exemptions that are currently provided for interest on loans. The exemption under services tax, which exempts interest, should be replicated under GST.

From a macro perspective, GST is the unification of multiple indirect taxes into a single law. Hence, it is presumed that the current exemption would be continued for banking and other financial institution, including nonbanking financial company (NBFC), as these exemptions create the basic foundation for taxing services provided by them.