GST impact on e-Commerce & Affiliate Industry

By: Mehul Jobanputra, CEO & Co-founder of 

I think GST seems to hold mixed consequences for the market. While it will bring about standardisation of taxation for the e-commerce industry, the price advantage to sellers may now not be available.

Earlier, small sellers and homegrown businesses did not have to get a VAT registration for doing business. This will change, because now every business venture, no matter how small, will need to get a GST registration done and bear the monthly compliance burden. This, combined with the 1% compulsory TCS (Tax Collected at Source) blocking a part of working capital, is likely to discourage some local, household establishments.

As far as the affiliate industry is concerned, the raising of the exemption limit from 10 Lakhs in VAT to 20 lakhs in GST spells good news, helping small time bloggers and website owners to fall out of the tax bracket. However, the pinch of the increased tax rate (18%) will still be felt as well as the compliance burden on the tax payers would become cumbersome on account of monthly filing made mandatory under the GST regime.

It would be interesting to see how the Government manages to cope up seamlessly with the data overload without compromising on the integrity. The intent behind GST is right but if the execution does not meet the intent,  an atmosphere of confusion can creep in the market.