IntroductionE-commerce has transformed the way business is done in India. The Indian e-commerce industry has been on an upward growth trajectory and is expected to grow at a compound annual growth rate (CAGR) of 28% between 2016 and 2020 to reach $63.7 billion by 2020 and surpass states -United by 2034. The sector reached US$14.5 billion in 2016. Much of the sector's growth has been triggered by the increasing penetration of the Internet and smartphones. The ongoing digital transformation in the country is expected to take the total number of internet users in India to 829 million by 2021 (59 percent of the total population), up from 373 million (28 percent of the population) in 2016, while the total number of networked devices in the country The country is expected to reach two billion by 2021, up from 1.4 billion in 2016. Say no to plagiarism. Get Custom Essay on 'Why Violent Video Games Should Not Be Banned'?Get Original EssayTotal online spending, including domestic and cross-border purchases, is expected to rise 31% year-on-year to Rs 8, 76 trillion ($135.8 billion) by 2018. Cross-border shopping by Indians reached Rs 58,370 crore ($9.1 billion) in 2016 and is expected to grow 85% year-on-year in 2017. Top 3 countries preferred by Indians for cross-border shopping in 2016 were USA (14%), UK (6%) and China (5%). India's consumer internet market is expected to grow 44% year-on-year to reach US$65 billion in 2016. in 2017, up from US$45 billion in 2016. Online travel agents account for the largest market share (70 % in the Internet consumer market, while the remaining 30% is occupied by horizontal e-commerce, fashion, furniture, grocery, hospitality, food technology, taxi aggregators, educational technology and alternative loans, among others. India's internet industry is expected to double to $250 billion by 2020, or 7.5% of gross domestic product (GDP), with the number of mobile internet users reaching around 650 million and that of high-speed Internet users. reaching 550 million.5 Around 70 percent of India's total automobile sales, worth US$40 billion, are expected to be digitally influenced by 2020, up from US$18 billion in 2016. road ahead The e-commerce sector has had a direct impact on micro, small and medium enterprises (MSMEs) in India by providing means of finance, technology and training and also has a favorable cascading effect on others sectors. The total size of the e-commerce industry (only B2C e-commerce) in India is expected to reach $101.9 billion by 2020. Technological innovations such as digital payments, hyper-local logistics, engagement Customer analytics-based and digital advertisements will likely support the industry's growth. With the number of electronic payment gateways and mobile wallets increasing, it is expected that by 2020, cashless transactions will account for 55 percent of online sales. The growth of e-commerce sector will also boost employment, increase revenue from exports, increase tax collection through old checks and provide better products and services to customers in the long run. Impact of GST on the e-commerce sector: E-commerce or electronic commerce (a shopping center inonline) manages the purchase and sale of products and services exclusively through electronic channels. E-commerce accounts for around 33% of the global market with positive growth in the near future. As per the latest GST Council meeting, registration of all taxpayers registered under TCS can begin from September 18, 2017. Section 43B(e) of the Model GST Act defines an e-commerce operator (Operator ) as any person who, directly or indirectly, owns, operates or manages an electronic platform whose objective is to facilitate the provision of goods and/or services. Additionally, a person providing information or any other service incidental to or in connection with such supply of goods and services through an electronic platform would be considered an operator. However, a person supplying goods/services on his own behalf will not be considered an operator. For example, Amazon and Flipkart are e-commerce operators because they allow real-world suppliers to deliver goods through their platform (commonly known as the Marketplace model or Fulfillment model). However, Titan providing watches and jewelry via its own website would not be considered an e-commerce operator within the meaning of this provision. Similarly, Amazon and Flipkart will not be treated as e-commerce operators with respect to supplies they make on their own account (commonly known as inventory model). The MGL provides that every operator must register on the GST portal, irrespective of the threshold. specified for GST registration. This is the biggest disadvantage for small retailers because they work with a fixed working capital and will have to pay taxes and apply for a refund later, which is a tedious process. The success of the e-commerce industry largely depends on the growing number of retailers. entrepreneurs, who fall under the category of unorganized retail sector. The government has included these players in the ambit of GST in a bid to broaden the tax base and has introduced specific provisions for e-commerce companies. In the current regime, there is no uniformity in tax rates across different states and hence each state determines its own product specific tax rates. For example, a cell phone in State 1 is taxed as VAT at 5 percent and in State 2 at 14.50 percent. As a result, sellers from State 2 would not want to sell locally but would prefer to sell from State 1, resulting in a loss of revenue for the state. E-commerce operators have set up distribution centers only in certain locations and collect the applicable VAT. on sales made from these centers. To compensate for the loss of VAT revenue, many states have recently imposed an entry tax on goods from other states, which discourages sales from other states. The head tax acts as a trade barrier, restricts the free movement of goods from one state to another and increases costs for traders. However, these trade barriers will cease to exist to the extent that the GST includes the entry tax. The destination state collects GST revenue on sales, regardless of where the sale was made. Further, there is no rate arbitrage under GST as the classification of goods and GST rate are common across states. It is mandatory for all e-commerce operators to levy tax at the rate of two percent under the