The Goods and Services Tax (GST) Constitutional Amendment Bill was passed in Parliament late yesterday and ecommerce companies have widely hailed the move which will bring significant clarity and cut excessive taxation. The GST is a uniform indirect tax which is levied on goods and services across the country. However, the exact rate and implementation will be discussed over the next few weeks while the full roll out is expected to take a couple of years, as indicated by this Mint report. Here's how the GST will affect ecommerce: 1. Reduce barriers between states: For ecommerce and logistics companies, it would reduce the barriers for interstate deliveries. "GST will also open new markets for online commerce because, today, due to complexities of entry tax and other processes, some states customers can not order everything from online shopping destinations," Vijay Shekar Sharma, CEO of Paytm said. Entry taxes for ecommerce companies has been spreading to different states with Madhya Pradesh being the latest to impose a 6% tax on goods coming in from other states which were ordered online. Uttar Pradesh, Assam, Odisha, Uttarakhand, Rajasthan, West Bengal, and Mizoram also levied the tax citing loss of revenues. In June, Amazon challenged the ecommerce tax in Gujarat and filed a case in the high court against the state and the commissioner of tax. Flipkart has sued the Uttarakhand and Gujarat government over the entry taxes into the respective states. 2. Increase in administrative costs: Since the GST is a destination tax, the compliance onus will…
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