From banking to aerospace, every sector is buoyant with expectations from the upcoming Budget. As February 1 looms, hope springs eternal
Illustration: Chaitanya Dinesh Surpur
1. ECOMMERCE
The size of the Indian ecommerce market is estimated to touch $40 billion in 2018. Good policy and fiscal support, especially around GST, can catalyse growth in the sector.
Challenges
• Large number of consumers, especially in rural areas, cannot access digital transactions.
• Logistics account for 2-10 percent of the cost of ecommerce.
• FDI policy for sector is still evolving.
• There are grey areas around characterisation of ecommerce transactions for tax treatment, especially for foreign players.
• GST has resulted in additional compliance requirements.
• Working capital has been choked due to additional GST on stock transfers.
• The Composition Scheme—wherein taxpayers can get rid of tedious formalities and pay GST at a fixed rate of turnover—is not available for ecommerce transactions.
• There is lack of clarity on tax treatment of cash-back schemes, gift coupons and vouchers.
• While the law mandates passing on benefits that businesses accrue from GST to end-consumers (anti-profiteering), there is no clarity on the methodology to be followed.
(This story appears in the 02 February, 2018 issue of Forbes India. To visit our Archives, click here.)