small-scale vendors registered on ecommerce sites such as Airbnb, Flipkart and Amazon will have to pay tax upfront under the goods and services tax (GST) regime when they receive payments, even if they fall in the exempted category.
That’s because all vendors registered on such sites will be liable to 1 per cent tax collected at source. GST is on its way to being rolled out on July 1 with most goods and services having been slotted into their respective slabs by GST Council last week.
The objective to impose 1 per cent on these sites is to capture all transactions in the ecommerce space and not allow anything to slip through the cracks.
All ecommerce players are bound by law to deduct tax from registered vendors whenever there is a sale, irrespective of whether the seller is liable to pay tax or not. They will withhold 1 per cent whenever the payment is made to the seller. The GST Council has decided to exempt hotels with room tariffs up to Rs 1,000 per day as also a number of household goods.