Taxman Alert: Ecommerce Companies May Face Audit On GST Rate Cuts

The National Anti-Profiteering Authority has directed the director general, audit, to conduct an audit of ecommerce companies

The GST Council has slashed tax rates on household products such as chocolates, toothpaste, shampoo, etc, from 28% to 18%

The audit will check whether the excess amount collected before rate reduction has indeed been refunded to buyers or not

The National Anti-Profiteering Authority has directed the director general, audit, to conduct an audit of ecommerce companies such as Amazon and Myntra. The tax authorities want to check whether these companies have passed on cuts in goods and services tax (GST) rates to consumers.

Since the rollout of GST in April 2017, the GST Council has slashed tax rates on a host of household products such as chocolates, toothpaste, shampoo, washing powder, and shaving creams from 28% to 18% in November last year.

More products were shifted to a lower slab or fully exempted at the 26th GST Council Meeting held in March.

According to reports, tax experts say it’s important for ecommerce companies to look at the aspect of refunding excess tax to consumers.

The objective is to check if the excess amount collected before rate reduction has indeed been refunded to buyers or not. Hence, it becomes critical for ecommerce platforms to examine this aspect and refund the amount ( if required) as soon as possible,” said Anita Rastogi, indirect tax partner, PwC.

Earlier in July, reports also surfaced that ecommerce companies such as Amazon India and Flipkart could finally be brought under the ambit of the tax deducted at source (TDS) and tax collected at source (TCS) provisions of the GST as they would have to prepare for withholding tax provisions in two months.




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