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GST – A Game Changer for Indian E-Commerce Industry !

gst e commerce india

There have been a lot of changes in the Indian economy and therefore the expectations and requirements of people have also been changed. Technological advancement is taking place in all industries and the Indian e-commerce industry is not apart from technological and strategic advancement.

No one can deny the fact that e-commerce has re-entered India and is digging in for the long term establishment. Even small and medium sized retailers of the country need to ride the wave and are prepared to make a fortune out of the market place idea. It might be the fact of the present time that web based shopping has become to be quite popular. However, the idea of e-Commerce was presented long ago in the twentieth century.

Present, Past and Future of Indian E-commerce

  • 1991: Introduction and Development of E-Commerce.
  • 2002: IRCTC instructs India to Book ticket on the web in August 2002. The websites like Makemytrip and Yatra emerged for this purpose to ease the ticket booking procedure for the general public.
  • 2007: Deep Discounted model by Flipkart in e-commerce industry which brought revolution to the entire e-commerce industry.
  • 2014: Secure online shopping and payments via trusted websites like paypal or money down.
  • 2016: Extension of E-Market gave an instant boost to the Indian online market but it still is way behind the Indian online market of advanced countries like UK and US. 

Future possibilities

Online networking or social media websites has now turned into the hub for the vendors which empower them to examine and analyze the customer decision on the basis of their purchase activities. Social network like Twitter, Facebook, LinkedIn, Google+ and many others has turned into a medium for simple log-in and purchase. Also, customers can stay updated through the posts distributed on this media.

Further, promotions and advertising on these social websites have expanded the odds of success of creating transactions to numerous folds. There will be so many advancements in Mobile Commerce and Online Grocery Store. There are huge possibilities of increased innovation in logistics as well.

With the help of GST, some critical sectors, for example, consumer durables and FMCG, Media, Automobiles and Entertainment stand to gain their present levels because of overall reduction that will take place in tax rates and seamless flow of credits.

While the service areas, for example, Banking, Telecom and E-trade may see marginal increment in cost to end customers in the very initial years of implementation of GST because of growth in the tax rate but will in the long run result in the reduction in cost to customer on the account of business and tax efficiencies.

Related Read: Will The GST Be A Boon Or A Bane For Startups And SMEs?

GST will change the entire position of organizations that are carried out till the present time. Thus, it is a suitable time for industries to prepare themselves and strategize the implementation of GST into their operations. Model GST laws that were released in June 2016 and business process reports released a year ago, organizations should begin evaluating the GST impact on the operations of their business.

Pattern of product or service pricing, IT, supply chain optimization, warehousing strategies, accounting and tax compliance systems are a few aspects that should be re-considered and re-checked with the measures so that it can be aligned with this proposed key reform.

Impact of GST In Indian E-Commerce Industry

The revenue of India’s e-commerce is anticipated to grow with time and jump from $30 billion in the year 2016 to $120 billion by the year 2020. And, it will constantly grow at the annual rate of 51%.

The e-commerce and e-tailers GST is considered to be a positive development for the industry because the market places of this industry are able to manage and reduce various components of the tax in the complex service combination.

GST’s long term impact on e-commerce economy would be

  • Increase in employment
  • Better products and services to customers
  • Growth in export revenue
  • Increase in tax collection by ex-chequers

GST will give a strong boost to the market of e-commerce by bringing broadband and internet to the remote corners of the entire country. Also, it is expected to grow and it will give rise to the increase in efficiency and trade. For example, after the launching of JIO, the growth is expected to reach higher levels in country’s internet penetration.

Examples of Zero-Rated Goods: While Canadians have to pay GST/HST on most of the goods and services, a few products are excluded. Zero-rated goods incorporate groceries, for example, bread, produce and milk; country’s agricultural products, for example wool, grain, and tobacco leaves; and prescription medications. Essential medical gadgets or devices, for example, listening aids and dental prostheses, are tax excluded. Livestock, consumption fish and some transportation services are likewise tax excluded. Canadians normally don’t pay GST/HST for their homes, unless they are shiny new, and for health services, legal services and child care. The country does not impose the tax on tolls within Canada and on instructive or educational services, for example, coaching or tutoring.

Also Read: How Passed GST Bill Will Impact The Logistics Industry

GST/HST Tax Credit and Rebates: Canada sends eligible and suitable expense filers ages 19 and older a GST/HST tax credit on a quarterly premise. In 2014, the legislature started sending suitable tax filers the credit consequently. Therefore, accountants frequently encourage Canadians to record tax returns even when they have no income to report, with the goal that they can get the credit. Canadians can enroll on CRA’s site to get their GST/HST tax credit by direct deposit and to see their advantage via easy to use mobile application offered by the agency of taxation. People and organizations can likewise apply for GST/HST refunds on specific goods and services, for example, purchasing or building new structures.

Taxes: Taxes are usually an unintentional expense imposed on people or corporations that are enforced by any government entity, whether it is local, national or regional in order to properly finance the government activities. In economic and financial aspects, charges fall on whoever pays the tax burden, whether this is the official taxed entity, such as business or end customers of business goods.

GST Bill In Present Time

The GST Bill would be able to subsume various taxes from April 1, 2017 which includes excise duty and VAT. It will have four rates from now. There will be two standard rates of 12% and 18%, a move intended to limit the Congress party’s interest for a standard 18% impose. White goods and comparable products will confront 28% tax, rather than 26% proposed by the Center before. The cess on sin and luxury products, and the spotless energy cess on coal, should help the Center wipe up around Rs 50,000 crore to repay states for any income loss because of GST.

Rather than the present slab of 30-31% on products, for example, white goods, which incorporate extract duty of 12.5% and state VAT of 14.5%, GST highest slab will be 28%. The extra advantage of two rate indicates that will ensue the government is being utilized to decrease the minimal slab from the proposed 6% to 5%.

Related Read: Is Your Business Software Ready For GST ?

Also, a few products, for example, oil and shaving sticks, soaps, which would easily have gone into the bracket of 28%, will now be moving to the 18% slab.

Possible advantages of GST Bill updates

  • The customer price index basket will be reduced to the half level which will include food grains that is expected to be zero rated in future
  • The bracket of 28% is expected in cars and small cars would be able to avail the advantage of discounts.
  • Luxury vehicles will carry Cess.
  • Cess will face annual analysis and review which will need to be phased out in every five years.
  • There could be some changes on service tax rates or GST gold but there are no certain decisions yet.


Recent report uncovered that the expanding web and smart phone system are required to support e-commerce division in level II and level III Urban communities too. The study said that number of online customers in the country grew 95% somewhere around 2013 and 2015, and the number is predicted to achieve 140 million by 2018 and 220 million by 2020.

Also Read: Why These 10 Entrepreneurs Welcome The Recently Passed GST Bill !

The Indian e-commerce has a distinct advantage of innovative revolution, particularly in delivery and payment models, and it will keep on changing the Indian e-commerce industry for a very long period of time. Additionally, the profit of the economy will also get enhanced with the help of advanced Indian e-commerce industry. On papers the proposed GST bill rates look impressive and it is going to be the biggest tax reforms in India. Implementation will be the next crucial step.

(Disclaimer: This is a guest post submitted on Techstory by the mentioned authors.All the contents and images in the article have been provided to Techstory by the authors of the article. Techstory is not responsible or liable for any content in this article.)

Image Credits: gstindia.com

About The Author:

mr-ameen-khwajaEntrepreneur with 12 years of experience in Digital Marketing, Ameen Khwaja is presently the CEO/Managing Director of LatestOne.com (Palred Online Technologies Pvt Ltd).

He is skilled in strategic marketing and gets excellent coverage in building online community, sales and brand awareness for the products.



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