Over the last few days, a lot of small merchants, specially the ones who operate out of their homes, were a lot worries about the new announcement under GST, which asked the eCommerce companies to deduct 1% TDS from the payments made to vendors upfront.
However, the merchants and the eCommerce companies can relax, for at least sometime. The government has announced that the companies will not have to deduct the tax from day one of GST implementation. Government will announce a new date for the TDS deduction to come in action. Apart from this, smaller merchants will not need an immediate registration for GSTN, which was earlier required.
Under the previous announcement, eCommerce companies had feared losing business as a lot of merchants operate on a very small level, some even from home. Recently, in a meeting with government officials, the representatives of MSMEs had raised this issue.
The statement regarding this announcement was released by finance ministry, which stated that the companies will not have to deduct the 1% proposed tax before making the payments for goods which are sourced under GST. The statement also added that the government will announce a new date for the same in the coming days.
An Amazon spokesperson, in his statement to ET, welcomed the move and said that this announcement will help the small vendors continue to sell without the fear of getting their businesses wiped out for not falling in the lines of GST.
The finance ministry also added that to ensure smooth implementation of GST, the ministry has taken a decision to postpone the provision related to section 51 (TDS) and Section 52 (TCS) of CGST act 2017. It was claimed that the announcement was made based on the inputs received from trade and industry representatives.