The world is no longer going digital. It’s already there. Ask yourself. What’s the first thing you would do when you want to learn more about a business? You search for it on Google. Today, if a company is not present in line, it’s almost non-existent.
Covid-19 may have disrupted business operations for a while, but deep penetration of high-speed internet access and expansion Supply Chain the networks in the cities of level II and III act as catalysts for the development of the electronic commerce of the country.
According to a report from eMarketer, an Indian market research company, the country is expected to experience annual sales growth estimated at 27% in 2021. That’s $ 66.76 billion!
India is expected to top the ranking of the world’s fastest growing retail e-commerce markets this year. With the growing competition from online retail or online retail and Diwali fast approaching, it’s time to understand why online retailers need to start preparing for the season. holidays. A sophisticated website and lucrative offers aren’t the only concerns when preparing for the holiday online shopping season. Equally important is tax preparation. Here are five reasons why.
Not everyone practices the same tax transactions as your business – As e-merchants open their online stores to international customers, one of the most important tax concerns this holiday season will be dealing with cross-border tax compliance. The problem with doing business abroad is that it is not easy. You’ll end up jumping through the hoops as you maneuver through the various complexities of each country’s tax system. Knowing the different tax rates that apply to different products in different jurisdictions etc. will be essential, and this is only scratching the surface. Some of the fundamental tax transactions that are likely to occur are –
– Issue correct tax invoices with the correct product codes and relevant tax rates.
– Generate waybills and all other documents related to shipping and handling to ensure the smooth movement of goods from one location to another.
– Adapt to electronic invoicing and other digital systems mandated by various countries.
– Meet all compliance requirements when carrying out cross-border transactions
With discounting comes its fair share of compliance complications – Just a few weeks ago, e-commerce giants like Amazon and Flipkart were ordered by the Indian Supreme Court to allow investigation of large discount practices by India’s regulator, the Indian Commission. competition (CCI). As this legal battle unfolds, small and medium-sized e-commerce businesses will have to prepare for all kinds of price wars. Of course, low prices and high discounts are likely to lead to increased sales, but they will also lead to more complex tax compliance requirements, documentation, and audits. If your business doesn’t have a strategy or bandwidth to handle compliance requirements, it’s critical that you start preparing for the holiday sales well in advance.
Multiple points of sale mean multiple opportunities for errors – As an ecommerce business, it’s not enough to just operate through your own website, you need an omnichannel presence. This means you need to be present wherever your competition is. Multiple outlets can increase the risk of errors if your team continues to work manually and comb through mountains of paperwork. Adapting and implementing machine learning-based AI software can help you automate the invoice reconciliation process – not only will you save time, you will also save resources.
Tax transactions now take place in real time – India operates on a new system of taxation of goods and services. While our country may still be properly implementing and settling into real-time tax functions, other countries are way ahead of the game. This means your business needs to be able to manage tax transactions in real time. This includes generating electronic invoices, authenticating electronic invoices and ensuring that the same tax information is replicated on consignment notes that will accompany the goods to other cities, towns, states or even countries.
Tax transactions are not just about filing returns – Yes, tax filing is a very big part of the tax function, but unless your business doesn’t optimize its work, chances are it won’t be able to learn from its current performance and prepare for the next one. sale. The digitization of tax functions and the use of analytics and AI software will help your business understand where, when and how it can achieve better profits, better manage compliance and further increase tax efficiency – not just on its territory but also abroad.
E-commerce is a difficult puzzle to solve, but it is certainly not an impossible feat. Being tax-ready in time for the holiday season will allow your business to focus on what really matters: sales, profits, expansion, and overall growth.