E-commerce platforms, brands, and restaurants on e-commerce platforms anticipate cash flow improvements after the GST council's proposal to reduce the tax collected at source (TCS), as per a report by the Economic Times.
On Saturday, the council recommended that the TCS collected by electronic commerce operators, encompassing e-commerce, quick commerce, and food delivery platforms, be decreased from 1 per cent to 0.5 per cent.
This move was taken by the supplier to ease the financial burden on the suppliers who are making supplies through Electronic Commerce Operators (ECOs). As per a statement issued by the Ministry of Finance, “The GST Council has recommended reducing the TCS rate from the present 1 per cent (0.5 per cent CGST + 0.5 per cent SGST/UTGST, or 1 per cent IGST) to 0.5 per cent (0.25 per cent CGST + 0.25 per cent SGST/UTGST, or 0.5 per cent IGST) to ease the financial burden on the suppliers making supplies through such ECOs.”
Advertisement
“The change won’t be so significant as to impact profitability, but it will meaningfully help with freeing up cash flow that we can reinvest into the business,” as per a seller who spoke to the Economic Times. Several sellers reportedly highlighted that the move would give sellers more flexibility.
Under the chairpersonship of Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman, the 53rd GST Council met on June 22. Some of the recommendations of the council include: for the fiscal years 2017–18, 2018–19, and 2019–20, the GST Council has suggested waiving interest on penalties associated with tax demand notices issued under Section 73 of the GST Act. This waiver will be available to taxpayers who, by March 31, 2025, pay the entire tax amount asked for in the notice.
Advertisement
Similarly, the council has granted an exemption of up to Rs 20,000 per person per month for services provided by hostels outside of educational institutions. However, this exemption is only valid for stays of up to 90 days.
Just one email a week