As the government readies to implement goods and services tax (GST) from July 1, e-commerce companies including Flipkart, Amazon and Snapdeal have expressed their concern over an obligation of tax collection at source (TCS) to be imposed on them under the draft model GST law.

As per the proposal, e-commerce firms will deduct about 2 per cent of the amount payable to seller of goods/services and remit to the government. Industry observers opine that sellers selling their product on marketplaces usually have thin margins and the proposal to collect tax at source in GST would lead to vital working capital being blocked for a significant amount of time.