E Commerce in GST
E Commerce & E commerce Operator Meaning
1. What is E Commerce (Electronic Commerce )
Section 2(44) of CGST Act, 2017 defines E Commerce as supply of goods or services over the electronic network. In ordinary words , ” Purchasing and selling of Goods and services by Business and consumers through an electronic medium. ” is called E Commerce.
2 .Who is an e-commerce operator?
Sec. 2(45) of the CGST Act, 2017 defines Electronic Commerce Operator as “Any person or business who owns, operates or manages digital or electronic facility or platform for electronic commerce.”
In other words “If Any Person who is supplying Goods/Services on his account, however will not be considered as E-commerce operator.
companies like Ebay.in , Amazon.in , Flipkart.com, Myntra.com, Shopclues.com are called E commerce operator because they are providing “actual suppliers” to supply Goods and services via their platform
If Any Business supplying Goods and Services through its own website would not be considered as e commerce operator for the purposes of this Provision.
for example, if we are selling “I Phone” through amazon.in then it is E-commerce operator but if when we are selling through Its Own Site i.e. apple.com store then it will not be considered as E-commerce operator.
Registration for suppliers supplying Goods or services through E-commerce operator
Registration for E-commerce operator
Section 24(ix) of the CGST Act, 2017 prohibits the threshold limit exemption to such E-commerce operator
so they are bound to be registered ,without considering the value of supply made by them. This condition is applicable only when the supply is made through the electronic commerce operator who is liable to Tax Collected at Source (TCS) u/s 52 of the CGST Act, 2017.
Threshold Exemption for E Commerce Operator
If the e-commerce operators are liable to pay tax on behalf of the suppliers under a notification issued under section 9 (5) of the CGST Act, 2017, the suppliers of such services are entitled for threshold exemption.
TCS (Tax Collection at source) under E-commerce Operator
The above said E-commerce Operators are required to collect an amount @ 1% (0.5%CGST+0.5% SGST) of the net Taxable supplies (Total Supplies- Return by customers).
TCS will be collected by E-commerce operator if consideration with respect to supplies is collected by Such Operator from customers and transfer to actual supplier.
Situations when TCS will be/will not be collected by E-commerce operator
If you are supplying own goods and services through your own website then as per Sec. 52 of CGST Act, 2017 TCS will not be collected because TCS is required to be collected by E-commerce operator when taxable supply is made through it by other supplier & consideration is collected by E-commerce operator. When someone is selling own product through own website there is no need to collect TCS. Here normal GST rate will be applicable.
If Someone is Purchasing goods from different vendors and are selling such goods on own website under through his own billing then TCS will not be collected because supply is not made by other supplier. Here 2 transactions are in picture- (a) Purchasing through another vendor (b) Selling through own website.
In First situation GST will be charged by Vendor and Input will be available to the person receiving such supply.
In the second situation is supply through own and not through other suppliers so no need to collect TCS and Transaction will attract GST at normal rates.
a. When Seller supplies exempted or Zero-Rated Goods through E-commerce Operator then As Per Section 52(1) of CGST Act, 2017 TCS will not be collected because according to such provision TCS will be collected when taxable supply is made through E-commerce operator when supply is not taxable TCS will not be collected.
b. Travel agent providing services through E-commerce Operator will be liable to collect TCS under Section 52 of CGST Acct, 2017.
c. When if there is transaction in which 2 or more E-commerce Operator are involved then in such case each transaction will separately examined as per sec. 52 of the CGST Act, 2107 and TCS will be collected accordingly.
Collection/Remittance/ Input tax credit of TCS
Collection: E-commerce Operator should make collection during the month in which consideration amount is collected from the recipients.
Remittance: The amount collected by E-commerce Operator to be deposited to the Government within 10 days after the end of the month in which amount was so collected.
Input Tax Credit to the Supplier: TCS paid by operator to Government will reflect in GSTR-2 of actual supplier based on GSTR-8 filed by operator
Return and Matching concept in E-commerce Provision
Return: As Per Section 52(4) & Section 52(9) of the CGST Act, 2017, Every E-commerce Operator is required to furnish a statement electronically containing the details of outward supplies of goods or services made by it and includes supplies returned through it and amount collected by it as TCS during a month Within 10 days after the end of such month.
Statement will be filed in form GSTR-8 except this operator is also required to file an annual statement by 31st day of December following the end of the financial year in which the tax was collected.
Matching and Mismatching under E-commerce
Details of supply furnished by Every E-commerce Operator is his statement for the month will be matched with corresponding details of outward supply furnish by concerned supplier in his return. Where the details of outward supplies declared by E-commerce operator do not match with the corresponding details by the supplier discrepancy will shall be communicated to both persons. [Section 52(8) and Section 52(9) of the CGST Act, 2017]
When a discrepancy is communicated to supplier or E-commerce operator and the same is not rectified by either Supplier or E-commerce operator same will be added to the output tax liability of the said supplier in his return for the month succeeding the month in which discrepancy is communicated.
The supplier in whose liability amount has been added shall be liable to pay tax along with the interest on the amount added from the date such tax was due till the date of its payment. [Section 52(10) and section 52(11) of the CGST Act, 2017]
Image credit : Mr Varun S