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Give TDS relief to small sellers on e-commerce platforms: IAMAI
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SME Times News Bureau | 14 Jan, 2021
The Internet and Mobile Association of India (IAMAI) on Thursday said
that its has appealed to the government to reduce TDS on e-commerce
platforms to 0.25 per cent from 1 per cent to give a much-needed relief
to small sellers in the Union Budget 2020-21.
The uniform TDS on
e-commerce transactions is creating major challenges for the small
sellers who are conducting business via e-commerce platforms.
"Reducing
TDS will help achieve the tax trail without creating the unintended
cash-flow concerns," the IAMAI said in a statement.
"While it
understands that it was an important move on part of the government for
better monitoring and realisation of taxation, it has led to unforeseen
consequences hurting SME sellers".
IAMAI had earlier shared with
the authorities an illustration that suggested for merchants who have a
turnover of up to Rs 1.25 crore, 1 per cent TDS under the new provisions
would exceed their total tax liability, resulting in an unnecessary
refund position.
"Or, in other words, create cash flow and
working capital concerns for small businesses," said the IAMAI which has
now appealed to the authorities in its pre-budget memorandums to reduce
the rate of TDS.
Given the Covid-related economic slowdown,
e-commerce platforms have proven to be a crucial lifeline for small
scale and MSME sellers, who do not have the marketing or logistics
bandwidth for wider outreach and are now using ecommerce platforms to
sell across the country.
"Unfortunately, the TDS, over and above
the pre-existing TCS under GST, now means that such sellers conducting
business over e-commerce platforms have a considerable amount of their
total revenues locked up under tax claims," the association argued.
Forcing
small businesses into prolonged tax refund claims for release of
critical revenues is perhaps unwarranted under the present
circumstances, it added.
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