GST and Online Marketplace: A Love-Hate Affair

Abstract

Without any doubt, India is on course to become the second biggest online marketplace behind China. The obvious reason behind this is our population, especially the younger lot, is accepting and utilizing this digital and internet based transformation to the maximum, mostly through smart phones. People are enjoying the luxury of sitting and placing orders from anywhere on ecommerce & mcommerce websites through their smart phones. This online marketplace has seen an explosive rise in business and that is the reason, every offline business whether small or large wants an online presence, in any form; let it be a fully fledged self owned or by being just a seller on another website. As, online marketplaces open new opportunities for businesses to gain a share in this huge infectious market, no business wants to let go this opportunity and thus , are inclined to be associated with it in some form or the other. However, with the introduction of Goods & Services Tax (GST) by the Indian Government, which is based on ‘one tax, one market’ concept, the pace at which our online marketplaces were running seems to be getting an impact. This is because of the fact that businesses operating in both offline and online mode would be migrating to new tax system and with issues like rising competition, shrinking profit margins, blocked working capital, confusion in registration for GST, complex tax issues, fewer concessions, compliance issues in case of refunds and returns etc, conducting and settling an online business becomes a challenge in itself. Through this paper, the author intends to highlight and bring to foreface, the various factors that may result in growth or downfall in online businesses, post GST implementation in India.