Bengaluru: India's IT capital is the hub of booming e-commerce. And in budget 2015, India's e-commerce companies are hoping they will find a way out of their current tax muddle. With online shopping and online transactions growing by leaps over the last year, the big e-commerce players like Amazon and Flipkart are waiting for the Finance Minister to announce a uniform tax structure that will redeem the industry.
Sapdeal, Amazon India, Flipkart, Myntra, Urban Ladder ask any e-commerce player in the country on the one reform they're really looking forward to, and the answer is the same: Goods & Services Tax. No surprise there. The sector has been going through some taxing times from fighting double taxation, to taking flak from multiple interpretations of existing tax policies.
Players hope that with the implementation of Goods and Services Tax (GST), they will get a stable indirect tax regime, one that can help the sector achieve revenues of 30 Billion US Dollars (Rs 1.80 lakh crore) by 2020, from the current 12 billion dollars.
Ashish Goel, CEO of Urban Ladder said "first expectation is, if the GST comes into play, even if there is a sanction in the Budget, it will be a fantastic step for industry".
India's e-commerce leader Flipkart's Chief Financial Officer (CFO) Mukesh Bansal said "biggest expectation is clarity around the GST. We believe that with the GST implementation, all taxation will become easier and translate into cost savings for consumers".
But the industry's demands go beyond a prayer that their run-ins with the state and central tax authorities will end soon. Players hope that the Finance Minister will find it in his heart to exempt them from VAT and sales tax. And with indications that the Centre is looking at a regulatory framework for the industry, companies are upbeat about the upcoming budget.
Commenting on this, Mukesh Bansal said "'it is a positive sign that government is trying to look more into it. It will lead to better laws and regulations and it will ease of doing business in the online world".
This optimism is understandable. A more uniform and stable tax regime like the GST offers hope that companies can look beyond keeping the taxman happy, at satisfying the consumer. The industry is also hoping the government would open doors for more Foreign Direct Investment (FDI) in the sector.
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