The Goods and Services Tax (GST) is the biggest economically reform in India after Independence. This new tax system becomes headaches for small merchants and e commerce companies. India government decided to start new tax system from July 1, 2017. It makes the panic situation in the market about new rule and regulations. The retailer did not know anything about the new tax system in India. They only know it is simple text only. It is a very complex task to arrange proper document requirement and product classification holding with a percentage of tax charged. Retailer threatened by bureaucracy in fair means of tax. There are many small merchants who have been dropped their business because they cannot meet new requirements rule and regulation according to the new tax system.
Difficult to Understand:
This new tax system is complicated and the merchant cannot understand the different category according to new rule and regulation. It is very difficult situation for the retailer to figure out existing stock should be taxed or not taxed. The customer returns product including tax or not. The Record Keeping should be difficult in starting months and how to pay the monthly tax return genuine ways. The government completely failed to provide valuable information to businesses to handle GST in a professional way. There are no proper ways to handle GST in an official way.
Different Rate of GST Depends upon Product and Services:
The GST provides a different rate of tax that depends upon the various type of services and product. It’ll make panic situation between retailer and e-commerce Company to understand what rate of GST is charged on various product and services. Even the professional accountant does not know basic things about GST. The rate of GST start from zero to 2 8% that depend upon product and service it is very difficult to understand the different rate of GST on various type of product and services. It is not an easy job to select right product with suitable GST charges.
Hard to Provide Bonus or Bundle Offer:
It is very difficult to provide a bonus on bundle offer for a customer in e commerce companies likes Flipkart and Amazon, Snapdeal etc. They have to pay GST on MRP or retailer price. It is a bad time for E commerce companies. It is very difficult to match according to new rule and regulation in short time period without proper information regarding new tax system. It is very complex to pay tax on warehouse stroke according to new GST tax perfect match with the product category.
Less Profit for Merchant:
The new tax system is the rock all type business in new rule and regulation. Businessmen have to focus on arrangements of a proper document. It is not easy to promote their business in a professional way with a competitive market price. They have to pay plenty for wrong taxes even their product and business can be sized according to new rule and regulation. It decreases the profit of merchants and E-Commerce companies.
These are some major problem to small merchants and E-Commerce companies. The list of problem does not stop here it is endless government should take proper step to handle this situation in a professional way to get maximum profit to businesses in a proper way.