In what could be seen as a deeply ironic move on the part of Indian ecommerce startups, founders and top officials of India's ecommerce biggies like Flipkart, Snapdeal and Amazon have come together and joined hands in a mission to get changes done in the draft model Goods and Services Tax (GST) law.

Their reasoning behind the move is that all of them are worried about the rules related to tax collection at source, or TCS, a provision in the GST.

If and when the TCS rule comes into action, all the ecommerce companies in the country would be required to collect and remit taxes on behalf of the sellers on its platform. Since almost each of these websites have thousands and thousands of merchants and sellers on their platforms, they argue, this would end up being an extremely cumbersome and time consuming activity for them. In addition to this, it would even discourage sellers to join their platforms, which would end up affecting their business. Hence, the ecommerce companies strongly believe that the GST bill in its existing form with the TCS clause has the potential of bringing the whole of country's e-commerce industry to stagnation.

Goods and Services Tax (GST) was first introduced in the 2006-07 Union Budget and was scheduled to be implemented in 2010-11. But, the bill was finally passed in the Parliament in August last year (2016).

Ironically, when the bill was passed, there was a sentiment of cheer and celebration in the startup industry with some even taking to Twitter to express their opinions on the bill.

Officials of these ecommerce biggies are contesting that a thorough impact analysis of this tax provision on the online marketplaces had not been carried out diligently by the government. And now, with the draft model GST law due to be finalised at the end of February, there's a sense of panic and commotion in the industry.

Flipkart's Sachin Bansal in a tweet dated 3rd Aug, 2016 wrote, "#GSTBill will not only unlock huge productivity but also create millions of formal sector jobs."

Resonating with his sentiments was Snapdeal's Kunal Bahl, who took to Twitter after the bill was passed in the parliament on 3rd Aug, 2016 and wrote, "Welcome passage of #GSTBill! Digital commerce removed geographical barriers, GST will remove tax barriers. One India means faster growth."

But they now seemed to have made a U-turn on their sentiments back then in August, 2016 and joined hands with SMEs, sellers and banks asking the government to do urgent amendments in the model GST law. They all are sure that if the law is implemented in its current form, it would do them more harm than good.

Let's see if the group succeeds in pressurising the government to make the amendments in the law. Whatever be the case, we will keep you updated.

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