LAHORE: Experts have urged the government to withdraw the proposed general sales tax (GST) on e-commerce marketplaces, saying it would dwarf the growth of the nascent market.
Speaking to media persons, Daraz Group Global CFO Kiran Faruqi said, “In the federal finance bill 2021, we as an online marketplace have seen several constructive developments, however, there have been certain changes proposed in the Sales Tax Act 1990, which pose a threat to the nascent marketplace industry in the country.”
Taking to her official Twitter handle, Nest I/O Founder Jehan Ara tweeted, “Marketplaces are a new phenomenon in this country and need much more time to grow and strengthen. 17% GST will be too much for them to bear.” “Do we want to nip them in the bud?” she questioned.
She said that the proposal states that platforms operating online marketplaces would now be included within the definition of tier-1 retailers and are proposed to be taxed at 17% on all transactions conducted on the platforms.
“For an online marketplace model to work, the title of goods must remain with the seller – not the online marketplace as it would be the case if the proposal is implemented,” Faruqi highlighted.
According to her, the proposal would effectively make the online marketplace a legal seller instead of the actual seller of the product.
