Several ecommerce companies have likely missed the November 10 deadline to deposit a part of the taxes due from their sellers, now mandatory under the Goods and Services Tax (GST), because of hurdles posed by various state governments. The ecommerce companies would likely become liable to pay interest as well as heavy penalties as a result, tax experts said. Amazon India has informed its sellers that it was unable to implement tax collection at source (TCS) for October — the peak festival sales period for ecommerce companies this year — in as many as 12 states due to “technical issues”.
Experts say the problem relates to several state governments requiring ecommerce companies to have a physical local address to be able to register themselves for depositing taxes deducted from their vendors. Starting October 1, it became mandatory for ecommerce companies to deduct towards taxes 1% of the net sale value for each seller before paying them. ET reported last week that a number of ecommerce companies were unable to register for depositing TCS as some states have been insisting on brick-and-mortar offices within their jurisdictions.
The Union government, however,has clarified that ecommerce companies can register with a head office address and are not required to have an office in each state. As the November 10 deadline passed, an Amazon executive informed sellers on Saturday through their Facebook group that due to “technical issues” the company was not able to report TCS in Gujarat, Punjab, Goa, Bihar, Chandigarh, Chhattisgarh, Meghalaya, Assam, Himachal Pradesh, Jammu and Kashmir, Andaman and Nicobar, and Lakshadweep.