Effect of GST ( Goods and Service Tax ) on Online Shopping & e-Commerce Websites.
GST has been a hot from the past few years when discussion of its implementation has been going on. Finally w.e.f from 1st July, GST has been implemented on everything. The only news you need to understand is whether GST will be good or bad for you. Talking about online shopping, its been almost fifteen years since online shopping started in the country and year after year, people have loved to shop online.
With the great discounts being offered, and wide variety of items to select, the online market place has become a preferred destination for people of all ages. However, the Goods and Service Tax implementation will bring about many changes in the online shopping experience of many users. Let us read below to know more on ways how GST will be effecting the online shopping experience.
Effect of GST on Online Shopping
The current tax system for online shopping for the vendors, sellers, resellers, etc. is quite complicated. GST aims to unify and simplify this system, making a streamlined process. However, shopping online will become an expensive affair post GST i.e. today onward, let’s see how:
- Impact of prices: Since the pricing impact on vendors or the company can be higher which will ultimately affect the consumers.
- Reduction of discounts: Since the eCommerce company would have to pay taxes to the manufacturer for purchase of any product, hence discounts can be reduced or cut shot.
- Cancellation difficulty: Since most of the websites offer a return and cancellation policy, but with GST in effect, returns of products might become difficult. After refund, the company would be required to pay taxes first and there will be some waiting period, after which they will get refund from the government. Hence, refund policy and cancellations online might get difficult.
- Overall rate of interest: The current services attract a tax of 14% so anything beyond the rate of say 18% can affect the end user.
Check out the positive benefits of GST ( Goods and Service Tax )on online shopping:
- Quicker delivery: Earlier with different taxes such as state tax, and many more, it became a time consuming process to get all the paper work done. After today’s implementation of GST, there will be just one window clearance and you will get your products delivered soon.
Complications in the online market place
With one single window for tax clearance, it becomes difficult to decide whether the vendor should be paying the tax or the eCommerce company. The taxability of digital supplies such as ebooks, musical subscriptions, etc. are also unclear.
Large eCommerce market players such as Amazon and ebay deal in foreign currency, hence tax rules for them are still not clear.