Photo: Reuters
Photo: Reuters

With few days to go for the roll-out of Goods and Services Tax (GST), the Indian Government has decided to provide some temporary relief to e-commerce firms.

The government has put on hold a provision to deduct a 1% tax collected at source from e-commerce firms from July 1 as part of GST. It also gave more time to small entities selling on an e-commerce marketplace to register with the GST, reports Business Standard.

E-commerce entities welcomed the decision, saying it would ease the cash flow position of vendors, but added that they wanted abolition of the proposed tax collected at source. They had also feared losing business as a large number of small suppliers were yet to register their operations as required under GST guidelines.

The Indian government, however, stated that the provisions of tax deducted at source and tax collected at source will be brought into force from a date which will be communicated later.

Their justification is that they cannot track each vendor of an e-commerce marketplace and this tax is needed to do this. It was reduced to 1% from the earlier proposal to levy up to 2%.