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  • Aug 14, 2019
    The e-commerce sector has boosted with a rocket speed in India. As per the estimated stats, the business is running at $2.3 billion and slates to grow at $38 billion in the coming 5 years. Flipkart, eBay, Amazon, and many other e-commerce sites have more than 250 million strong internet user base in our country. Setting up an e-commerce start-up has become easier. But one thing we need to understand is the taxes. If you are selling products and services you need to be ready to pay taxes on them.   Three taxes which an online customer must know are mentioned below:    Service Tax The government uses Service Tax for service-oriented businesses. The list of taxable services, that was limited to just 3 in 1994, has grown rapidly to a number of 114 today. This rate is increasing with a boost and hence the government has decided to go the other way and bring out a list of ‘non-taxable services’, rather than accounting for each service. Sales Tax Sales tax is levied on the sale of a commodity (Product), which is produced/imported and sold for the very first time. If the product is sold subsequently without being processed further, it is omitted from the sales tax. The sales tax in India is levied under the authority of both the Central Government Legislation and the State Government Legislation. Value Added Tax Value Added Tax - VAT applies only to the sale of ‘goods’. The pretext in the “value” refers to the modifications made to a product before it is sold to the customer. A company dealing with ‘services’, like Ola, or OLX will not have to pay VAT since they are just facilitators of a particular service.   With the guarantee of the empowering generation growth, this business will expand and expand and so will the taxes.
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