You must have seen our reports wherein we revealed how Amazon’s Jeff Bezos did not have a great visit to India last month. This was because the Indian traders are not happy with the Amazon CEO and his company’s work in India. They have been saying that these companies are clearly violating laws and offering deep discounts for their customers in a move which will take business away from small traders, even on the e-commerce platforms. It was also seen that the traders lobbied the government and the government also did not meet Amazon CEO.
Now, we are seeing the first impact of this traders’ protest against Amazon and other e-commerce companies in the country. Because the Indian Government proposed its financial budget for the year 2020-21 and there was a mention of e-commerce in this budget. The Indian Government revealed that they have proposed to deduct 1% TDS (tax deducted at source) for all the sellers who are selling products on the e-commerce platforms such as Amazon, Flipkart and others.
Also, they have said that this TDS applies to services provided by the sellers as well. Having said that, the Indian Government has also taken care of small sellers on the platform since the sellers which have sales of less than 5 lakhs on the platform are exempt from this TDS deductions. As expected, both Amazon and Flipkart along with other players are not happy with this move from the government.
These new amendments will be effective from April 1, 2020, will mean that the government’s tax collection pool will widen and it will also limit the people who were escaping from paying their income received from e-commerce sales in various ways. While this move will make the traders in the offline market happy, it can also be said that sellers on online platforms will have an increased burden due to these new reforms.