Budget 2016: GST will bring in clarity, boost e-commerce in India: IAMAI

'The extant tax structure of India is heavily fragmented with multiple indirect taxes levied by different authorities at different stages of a transaction,' IAMAI President Subho Ray said

Rooting for passage of GST in the ongoing Budget Session, industry body IAMAI said the move would bring in clarity in tax rules for online marketplaces and ease shipping of products by small and medium enterprises across states without worrying about multiple taxation.

"It is crucial that the GST Bill is passed in the Budget Session. This will bring huge benefits to the SMEs and e-commerce companies," IAMAI President Subho Ray said. 



"The extant tax structure of India is heavily fragmented with multiple indirect taxes levied by different authorities at different stages of a transaction," he added. 

The Bill, which subsumes all indirect taxes to create one rate and integrate the country into a single market, will help digital industry by providing clarity and uniformity in tax rates and regulations across the country, he said.

Currently, different procedures and rates of VAT and other forms of LBTs prevail across various states.

"This has created logistical challenges for the industry, besides giving rise to compliance related complications. Conflict of interests between tax authorities in case of inter-state transaction is a major pain point for us," Paytm founder Vijay Shekhar Sharma said.

Ray cited the examples of states like Uttarakhand, Kerala and Karnataka that charge a tax on online purchases ranging up to 10%.

"This often affects deliveries to these states and also, higher costs for consumers if the tax is passed on. Bringing GST will take away this multiplicity of taxes and boost e-commerce in the country," he added.

The Constitution Amendment Bill on GST is stuck in Rajya Sabha as the opposition Congress is seeking three key amendments in the proposed law, derailing the government's plans to roll out GST from April 2016.

The ruling party does not enjoy majority of its own in the upper house. Congress, the main opposition party in the house, wants three amendments in the bill.

Its three demands are a cap on the GST rate in the Constitution itself, removal of the proposed one per cent additional tax on inter-state movement of goods and setting up a judicial panel to adjudicate disputes among states.

Finance Minister Arun Jaitley had said he hopes the Congress would "see reason" and help in passage of GST legislation in the Budget Session of Parliament.