Indian ecommerce companies led by Amazon and Flipkart have approached the government with a request to extend the time to start deducting the 1% TDs from the sellers on their respective platforms. The reason for their asking for this deferment is that they claim their IT system will have to be revamped to accommodate this change in the invoicing process.

According to a report in the Economic Times, e-commerce companies have made representations and while they're fine with the tax deduction plan, they reportedly want an extension to be able to upgrade their IT systems, which will take time. However this indicates that e-commerce companies are okay with the levy of the 1% TDS, but implementation is the issue.

There have been sporadic complaints on the government’s new way to augment its revenue resources, when the overall kitty appears to be shrinking.

The sellers on the ecommerce platforms feel this new levy introduces a non-level-playing field since a seller selling the same goods in offline retail may not be paying this levy.

“Our sellers have voiced concerns that the deduction creates an unlevel playing field and will impact their cash flows and working capital,” the ET report quotes an Amazon spokesperson as saying.

This is countered by the offline retailers that the kind of expenditure that they have to incur in real estate and fixed costs like electricity and staff remuneration etc. are not applicable to the online sellers. The debate may never end.

It will be known in the next few days if the government agrees to defer the implementation of the taxation proposal.