EVALUATING THE EFFECTIVENESS OF THE INDIAN TAX REGIME IN REGULATING THE E-COMMERCE SECTOR

Abstract [English]

The influencing role of the rapid growth in the e-commerce segment of the Indian market has redefined digital economy and has brought distinct problems to the old tax administration system. In turn, the Indian government has put into operation a couple of tax policy interventions including the Goods and Services Tax (GST), Tax Collected at Source (TCS) and the Equalisation Levy that can augment tax compliance, seal revenue leaks and bring online transactions into the official tax net. This research paper critically appraises the Indian tax regime in controlling the escalating e-commerce industry using both the primary and secondary data. The research design applied in the study is a descriptive research approach, whereby a survey process of 100 respondents comprising of e-commerce sellers, tax consultants and consumers will take place. The results show that although transparency through processes like registration of GST and facilitating TCS has improved, lack of clarity and complicatedities associated with compliance in cross-border transactions have been largely impediments. The Equalisation Levy is novel and yet it has raised criticisms, some of these are unilateralism and a potential conflict with international tax norms. The trends in secondary data indicate the growing share of the e-commerce realm of business to GST collections and growing significance of digital taxation towards revenue mobilisation as a whole. Nevertheless, small, unregistered sellers still experience problems because of low digital literacy and regulatory awareness. It is an observation the research makes that despite the optimistic steps that India has taken towards its taxation system, particularly in tailoring it to the modern-day digital economy, it remains in need of simplifications, reaching out of its stakeholders, and bearing down in comparison to international tax regulations. Some of the recommendations involve clarification of the policies, increasing the facilitation of compliance, and enhanced cooperation with international tax institutions. The study is useful in current policy debates because it has improved understanding of the loopholes and opportunities in e-commerce taxation in India and gives a roadmap of a more comprehensive and efficient digital tax policy.