Impact of GST in India on the E-Commerce Portals

Impact of GST in India on the E-Commerce Portals

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Overview of Goods and Services Tax (GST)

Goods and Services Tax (GST) is one of the most crucial tax reforms in India which has been long pending, but would finally be implemented from 1st of July, 2017. GST Bill is an indirect taxation in India that merges most of the existing taxes into a single tax structure to make the tax system simpler.

With a concept of One Country, One Tax, One Market, five laws namely CGST (Central Goods and Service Tax) law, SGST (State Goods and Service Tax) law, IGST (Integrated Goods and Service Tax) law, UTGST (Union Territory Goods and Service Tax) law and GST Compensation law have been recommended.

India is all set to become the second-largest internet market in the world. It thus, becomes important to discuss about the impact of this revolutionary change in the Indian taxation system that will get rid of indirect taxes in India on the e-commerce companies. Even though the bill is under progress, still it is vital to look out for various impacts of GST that influence buyers and sellers on e-commerce.

List of Main Points Which an e-Commerce Business Need to Implement in Becoming a GST compliant platform

For an online seller, you must ensure that your online platform is working on the following points to become GST compliant platform:-

#1)Tax credit

After the implementation of GST, the service tax amount can be used as an input credit which increases the profit margin of online sellers.


Once GST bill India is implemented, it will be easier to identify fake, low quality and non-compliant sellers. This will give way to honest, tax-compliant sellers which will in turn lead to reduction in competition.

#3)Curbing resale of products (specially in B2B)

Wholesale gets deeply affected with customers buying goods on discount and reselling them offline. GST Act will be a highly effective method to curb this malpractice.

#4)Place of supply

Currently, for a business based out of Bangalore, might have to file separate paperwork for selling Eco-friendly products to buyers in Manipur, Rajasthan and Punjab. But, with the implementation of GST Tax in India, the e-commerce tax imposed by states will fade away.

To conclude, GST offers a perfect mix of simplified selling for the sellers and easy procurement for the buyers. If you are a seller on, then you need not worry at all about the GST India as we offer simplified procurement for buyers and sellers. We offer full GST compliant technology, 5-10% of overall savings, 100% tax credit and indirect cost savings to the sellers.

For buyers, we offer guaranteed cost savings of 2-10% of pre-GST prices, 100% tax credit on transactions, and indirect cost savings of up to 5%. With the onset of GST, B2B commerce would result in a more efficient supply chain management system where tax credits flow seamlessly and outside state sales and purchases are not penalized.

It would optimize the supply chain based on logistics availability and cost rather than tax structure. Once the GST bill India is implemented, the manufacturers and distributors would require to switch to a platform where sales and purchase is carried out with the supply chain, thereby making sure that there is no tax dispute. With the onset of digitization, it would be vital for manufacturers to consider the digital medium for publishing the product specifications to gain access to a wide consumer base.


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