Festive month GST collection low due to tax avoidance by e-commerce companies: CAIT
New Delhi, Nov 2 (KNN) The Confederation of All India Traders (CAIT) has alleged that the reduction in GST is a result of a major chunk of offline sales shifting to the E-commerce companies which have recently done a business of over 30,000 crore through their portals in the festive season.
”Since, these companies by flouting the Foreign Direct Investment (FDI) policy are indulging in deep discounting and predatory pricing policies, they have an expertise in avoiding GST and causing a severe loss of revenue to the Govt. A shortfall of approx. 4500 crores in GST as compared to last year would not have happened, if e-commerce companies hadn’t indulge in predatory pricing and deep discounting,” the traders body said in a press release.
”In fact, the GST collection for October festive month would have been higher than last year, if the e-commerce companies had been paying GST as per actual value of goods sold. The CAIT reiterates it earlier position that if the e-commerce companies are made to follow the rules in letter and spirit, both the Online as well as offline retail will flourish and coexist and there will be no loss of GST to the government. There is a need for urgent and immediate intervention by the government to investigate the working process of these e-commerce companies,” the release further said.
As per the latest GST collection data released for month of October, 2019 the tax collected was at 95,380 crore which is 5.5% lower than the same month last year. Despite being the most important month for retail sales in the country due to the festive season, a lower tax collection should not be assumed as a slowdown in the economy.