A worker sorts packages at a Flipkart Online Services Pvt office in the Jayaprakash Narayan Nagar area of Bengaluru. (Photographer: Dhiraj Singh/Bloomberg)

GST Countdown: Government Defers Implementation Of Tax Collected At Source For E-Commerce Firms

The government has deferred provisions relating to the collection of taxes at source on purchases made on e-commerce platforms, to ensure a smoother transition to the Goods and Services Tax regime.

The provisions relating to tax deduction at source and tax collection at source “will be brought into force from a date which will be communicated later”, the Finance Ministry said in a press release.

Under GST, e-commerce companies will have to deduct 1 percent as tax collected at source, while making payments to their suppliers.

E-commerce companies have to register under GST, but "the liability to deduct or collect tax will arise from the date the respective sections are brought in force," the Finance Ministry added.

However, suppliers of e-commerce companies do not have to register under GST immediately and can do so post the enforcement of tax collected at source provisions.

The provisions have been postponed with the "objective of ensuring the smooth rollout of GST and taking into account the feedback received from the trade and industry," according to the press release. The government will roll out the GST from July 1.