Flipkart, Amazon and other online retailers have demanded that India must roll back a proposed tax on all the third-party sellers on their respective platforms. The retailers stated that the burden of the agreement can be harmful to the growing industry, as per Reuters.

Apparently, the online retail sector is bracing for a potential tax of 1% on every sale that the sellers make on their platforms from April, in case the proposal gets approved by the parliament by the next month. This move has been considered as part of a bigger plan by the Narendra Modi government that aims to increase tax revenues and neutralize steep economic slowdown on account of the slumping demand.

The Federation of Indian Chambers of Commerce and Industry (FICCI) has made a presentation for the government stating that the tax will be detrimental towards the emerging e-commerce sector of the country.

The lobby group commented the tax will be causing an irreparable loss to the overall industry along with a grown compliance burden. This will further result in a decline in trading activities.

The U.S.-India Strategic Partnership Forum (USISPF), an influential and renowned lobby group has asked the government to provide the e-commerce companies with more time to for complying with the tax proposal.

As per the proposal’s copy reviewed by Reuters, the group wishes to defer the implementation of the new tax to April 1, 2021, or even later. A Spokesman of Flipkart based in Bengaluru stated that it had been working with the industry chambers to voice the concerns of the sellers as well as emphasize the risen cost of compliance.

The executives of the retail industry have requested the government to not impose the new tax on their contribution towards goods and services tax as it can take longer to refund.

Source Credit- https://money.usnews.com/investing/news/articles/2020-02-14/amazon-flipkart-challenge-new-indian-tax-on-online-sellers