A proposal to impose a 1% tax - 0.5% each by the state and the centre - on sellers of goods on e-commerce websites will be taken up for discussion by the GST council when it meets for a two-day official discussion in Srinagar on May 18.

If the proposal is accepted, e-commerce companies such as Flipkart and Amazon will start deducting 1% as tax at source under GST from sellers on their platforms.

These companies will further have to deposit the collected tax on behalf of the suppliers in a government-notified account within 10 days from the end of month in which the tax had been collected.

A detailed electronic statement of suppliers with a break-up of their taxes into Central- GST, State-GST, and Integrated-GST will also have to be furnished by these e-com players.

The e-com industry is against the proposal, suggesting that there could be compliance issues that could severely impact the working capital and margins of small-time sellers. Lobbying from industry players led to the earlier proposal being scrapped. The previous proposal had suggested fixing of the rates at 2% (1% each for state and Centre).