E-Commerce and GST Provisions in India

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.

Electronic commerce operator mean any person who owns, operates or manages 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 on which tax shall be paid by the electronic commerce operator if such services are supplied through it.

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:-

if the electronic commerce operator does not have a physical presence in taxable territory then any person who representing the same for any purpose shall be liable to pay tax. 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.

Registration Requirement :-

Section 24 of GST Law provide that E Commerce operator and Sellers selling goods through e-commerce portal would be required to register under the GST law irrespective of exemption limit specify under the Act.

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 where the consideration with respect to such supplies is to be collected by the operator.

Net Value of taxable supplies mean the aggregate value of taxable supplies of goods or services made during any month by all registered taxable persons through the operator reduced by the aggregate value of taxable supplies returned to supplies during the said month. Aggregate value of taxable supplies of services does not include services notified under Section 9(5) as discussed above.

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 with 10 days after the day of month containing the details of outward supplies of goods or services effect through it, including the supplies of goods or services returned 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 outward supplies furnished by the e-commerce operator is more than the value of outward supplies furnished by the supplier. The supplier should pay tax along with interest from the date such tax was due till the date of its payment.

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