"The impact on eCommerce sector is going to be positive, especially on the supply chain front" says Ananth Narayanan

Commenting on GST, Ananth Narayanan, CEO, Myntra – Jabong said, "We are quite bullish about the new tax regime that will help solve the complex indirect tax structure in our country and remove several embedded taxes. The good news is that nearly 80% of the items are below the 18% rate, and we expect that this move should not prove to be inflationary for the economy. We also expect the overall tax compliance to increase and therefore widen the tax net and enhance revenue generation. As industry leaders we fully support the government in this initiative.

The impact on the eCommerce sector is going to be positive, especially on the supply chain front with improvements in the movement of goods and simplification of the warehouse footprint. We also expect some benefits stemming from fungibility of taxes on goods and services.  While this is a landmark tax reform, certain provisions of GST such as the 1% TCS will pose a challenge for the industry by impacting the working capital of our sellers. We also hope that the government will keep essential categories like apparel and textiles in the 5% tax bucket.  Accessories like bags and watches could have been placed in the lower 18% bucket instead of the 28% bucket as they have become essentials for people.

Our team has been working on GST compliance for the last 7 – 8 months and has chalked out new processes and updated technology systems to comply with all laws. We are also working with our partners, many of who are small unorganized businesses; educating them on the laws and helping them identify and implement activities that need to be accomplished to ensure their compliance with the new laws.  However this is a big change for all the participants in our economy and  we hope that the government will give us time to transition smoothly especially since small businesses and traders which form the majority of our supplier base will need time and investment in order to comply with all reporting requirements of GST."