Founder of e-wallet giant Paytm, Vijay Shekhar Sharma said in an interview on Wednesday that the new tax reform in the form of the Goods and Service Tax (GST) will not affect e-commerce companies negatively. He was of the opinion that e-commerce companies are technology based companies and will adjust to the new tax regime as they anyway have to calculate various other taxes and benefits on the basis of the model of products. The industry experts, however,have said that according to the GST, the customer will withhold the tax as he buys, but the tax will be collected at source. In an interview with CNBC TV18, Sharma expressed his concerns about the rules and regulations being ambiguous and hoped that clarity will be provided as the reform is implemented.
Sharma said that his company, Paytm is looking forward to working with GST and contribute to payment and tax collections. The company might also collaborate with GST and work as a gateway for its transactions. Since e-wallet companies are technology based, they will be able to provide with better, more integrated ways of tax collection, he added. He opined that it might take the companies 3-6 months to adjust to the new reform, once it is implemented, which includes all compliances and verifications.
Sharma believes that the new reform will open new markets in the country, as different taxes in different states complicate the taxation procedure. But the tax rates will have to come with complete clarity, he strongly suggested. He believes that there would be a fundamental change in the market place, once the reform takes place. The GST bill is currently being debated in Rajya Sabha, where it is likely to get passed. The implementation of this reform is said to be starting from April 2017.