E-Commerce and GST Provisions in India
Hello readers! In this article, we will give you a brief about the E-Commerce and GST Provisions in India and the impact of GST on E-Commerce industry. As you know, E-Commerce can be described supply of goods or services through electronic channels such as Amazon and flipkart etc. They are facilitation actual suppliers to supply goods through their platform. Electronic Commerce and Electronic Commerce Operator has been defined under GST law. As per GST Law: –
Electronic Commerce define supply of goods and/or services including digital products over digital or electronic network.
Registration under GST for E-commerce Operator : – Every E-commerce operator who is required to collect tax at source under section 52 have to mandatory obtain GSTIN registration irrespective of his turnover. The requirement of this registration is separate from GST registration obtained as normal supplier.
Supplier who supply goods or services through E-commerce platform is also require to mandatory obtain GSTIN registration irrespective of his turnover. However, Government introduce the threshold limit for registration under GST for supplier of services through E-Commerce operator vide Notification No 65/2017-CT dated 15.11.2017.
Electronic commerce Operator cannot opt for composition scheme and the supplier also can not supply goods or services through E-commerce operator under composition Scheme.
Also See, “What is Composition Scheme,
Electronic commerce operator mean any person who owns, manages or operates digital or electronic facility or platform for electronic commerce.
Under GST regime e-commerce operator is classified under two head:
1. E-Commerce operator as a taxable entity
2. E-Commerce operator as on tax collection entity
Now we will be discussed the various provision of GST law which pertain to E-Commerce Sector.
E-Commerce Operator as a taxable entity
Levy of Tax on E commerce
AS per Section 9(5) of GST Act and Section 5(5) of IGST Act, the central or State government on recommendation of GST council may specify categories of services which are supplied through electronic commerce and specify categories of services on which electronic commerce operator shall have to pay tax.
All the provision of the act shall apply to such operator as if he is the person liable for paying tax in relation to supply of such services.
Physical presence of E Commerce Operator:-
A person who representing the electronic commerce for any purpose shall be liable to pay tax if in taxable territory their is no physical presence of electronic commerce operator. On the other side if electronic commerce operator does not have a physical presence and nor a representative in the taxable territory, then for paying tax such electronic commerce operator shall appoint a person and such person shall be liable to pay tax.
E-Commerce operator as Tax collection entity :-
Tax Collected at Source (TCS)
Section 52 of GST law deals with Tax Collection at Source (TCS) provisions for e commerce operator. Its provide that every electronic commerce operator, not being an agent, shall collect an amount calculated at the rate of one percent of the net value of taxable supplies made through it and consideration is to be collected by the operator.
Net Value of taxable supplies mean the aggregate value of taxable supplies of goods or services reduce by aggregate value of taxable supplies return to supplier during the said month. For the purpose of calculating the Aggregate value of taxable supplies of services its does not include services notified under Section 9(5).
Rate of Tax collected at source :- Rate of TCS is 1 percent under IGST Act and 0.50 percent under CGST and SGST Act.
Tax payment and Return Mechanism under E commerce
The TCS so collected shall be deposited in the appropriate account of the Government within 10 days form the end of the month in which collection is made.
Every E commerce operator shall furnish a statement within 10 days after the day of month containing the details of Net outward supplies of goods or services effect through it.
The Supplier who has supplied the goods or services through the e-commerce operator shall get the credit in respect of tax collected by the operator.
Return matching concept between E Commerce Operator and Seller
The details outward supplies furnish by the operator shall be matched with the corresponding details of outward supplies by the registered supplier. If the corresponding details do not match between e-commerce operator and supplier then the discrepancy shall be communicated to both persons within the time as may be prescribed.
If the discrepancy not rectified by the supplier or operator then the amount of tax shall be added to the output tax liability of the said supplier, if the value of Net outward supplies by the e-commerce operator is greater than the value of outward supplies by the supplier. The supplier should pay tax along with interest from the date such tax was due till the date of its payment.
For any query you can write at taxhouseindia@gmail.com Before making any decisions do consult with your professional or tax advisor.
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