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Wednesday, May 27, 2015

Widening of tax base: E-commerce business on I-T radar

The Income Tax department has trained its scanner on the burgeoning ‘e-commerce’ business in the country with the taxman deciding to monitor a host of services conducted by these popular online portals to better fill up the revenue kitty.

After making an official assessment report on the online retail business in India, the department has decided to track these “huge businesses” conducting services for extracting the special category of Tax Deducted on Source (TDS) which is taken from the payment made by firms and organisations for getting special services done on the internet retail space.

A “strategy action plan” formulated by the CBDT, the apex policy making body of the I-T department, for bolstering revenue collection in the current fiscal, has asked taxman to pay special attention to this area of business.

The action plan prepared for 2015—16, also accessed by PTI, states that advertisements on different websites of various organised and unorganised agencies, payments for jobs like creating a website, translation of pages, data entry of text, research, among others are areas which can yield “significant revenue” under the TDS category.

“The e-retail or e-commerce business is a fairly new avenue from the view point of collecting taxes and the sector is witnessing huge money changing hands. The department has prepared some trends in this regard and it has been decided to seriously tap this popular online sector for better TDS collections,” a senior I-T official said.

“A lot of people now purchase their daily goods or choice items through popular online retailers. A number of entities involved in the operations of these web portals are beyond the tax radar and as part of CBDT’s initiative to widen the tax base, this sector is important to be tapped,” the official said.

As per industry estimates, e-commerce business in India was about $6 billion in value in 2012 and is expected to reach $76 billion by 2021.
Source :  http://www.thehindubusinessline.com/

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