E-commerce firms may have got a reprieve with the government deferring the provision of collection and deduction of Goods and Services Tax (GST) at source, but they are awaiting clarity on its implementation.

At the same time, vendors to online marketplaces are struggling to become GST compliant to ensure that the chain for input tax credit is not broken.

Days before the rollout of GST, the government had deferred the TDS and TCS provisions and had also exempted small businesses with a turnover less than ₹20 lakh that supply to online marketplaces from registering. Larger vendors are, however, expected to enrol for the tax.

The GST Network has said these registrations will now start from July 25 though the government is yet to decide when the provisions for TCS and TDS will be notified. Under the Central GST Act, notified entities are required to collect TDS at 1 per cent on payments to suppliers to goods or services valued at over ₹2.5 lakh.

However, vendors are understood to be registering for GST to ensure that the chain of input tax credit is not broken.

Welcoming the delay in the TCS provisions, the All India Online Vendors Association said, “In the transition period, there were a few issues related to invoicing, data reconciliation, accounting integration with sellers’ ERP which are being rectified… Now that we are all geared up with out systems, the government can implement TCS soon as it is positive for sellers.”

Airbnb said that for hosts with a turnover of less than ₹20 lakh that are currently exempt from GST registration, the firm will remit the entire GST collected from the guests directly to the tax authorities. “Hosts with an annual turnover of over ₹20 lakh are required to obtain a GST number and remit the entire amount of the GST collected from the guest to the tax authorities until the TCS provisions become effective,” said Amanpreet Bajaj, Country Manager, Airbnb (India), adding that Airbnb is prepared for TCS and would comply with it when the notification comes out.

Tax experts said that while e-commerce firms are well prepared for GST, it is the vendors and small sellers who are still unsure about compliance under the new levy. Pratik Jain, Partner and Leader Indirect Tax, PwC India, said that the impact on vendors will be clear once the TCS provisions are notified.

“Over a period of time, the preference would be to deal with registered vendors,” he said.

“While the deferment of the TCS provisions has been beneficial to the e-commerce sector, it would be prudent for them to get their vendors registered as this process would take time considering the large number of vendors who would be registered with the portal,” said MS Mani, Partner, Deloitte.

For many sellers, the process of registration is a big challenge, said Archit Gupta, Founder and CEO, ClearTax.

“Sellers of e-commerce are yet to seek registration in some cases, they are unsure whether they should seek registration and which all States they should register and what will their compliance be like,” he said, adding that ClearTax has now launched a service called GST Bill Book for generating invoices.