“Stay informed about the latest developments as CBIC simplifies procedures for E-commerce Operators dealing with Composition Taxpayers and Unregistered Persons. Discover the key highlights and compliance measures introduced in Notifications No. 36/2023-Central Tax and No. 37/2023-Central Tax. Effective from October 01, 2023, these changes aim to streamline processes and enhance transparency.”
In recent developments, the Central Board of Indirect Taxes and Customs (CBIC) has issued two crucial notifications, namely Notification No. 36/2023-Central Tax and Notification No. 37/2023-Central Tax, both dated August 04, 2023. These notifications introduce a special procedure for e-commerce operators in relation to the supply of goods made by composition taxpayers and unregistered persons. This article delves into the details of these notifications, shedding light on the simplified procedures that businesses need to follow.
Notification No. 36/2023-Central Tax:
Under this notification, CBIC has empowered e-commerce operators with specific obligations and procedures when dealing with the supply of goods by composition taxpayers. The key highlights are as follows:
1. Inter-State Supply Restriction: E-commerce operators are now prohibited from allowing inter-state supply of goods made by composition taxpayers.
2. Tax Collection at Source (TCS): E-commerce operators are now tasked with the responsibility of collecting TCS in relation to the supply of goods made by composition taxpayers.
3. Utilization of TCS: Composition taxpayers can utilize the cash credited in their Electronic Cash Ledger due to TCS collected by the e-commerce operator for paying their output tax liability.
4. Electronic Furnishing of Details: To promote transparency and ease of reporting, e-commerce operators are required to electronically furnish the details of supplies of goods made through them by the composition taxpayers using FORM GSTR-8 on the common portal.
The effective date for the implementation of these measures is October 01, 2023.
Notification No. 37/2023-Central Tax:
Similarly, CBIC has issued Notification No. 37/2023-Central Tax to outline the special procedure for e-commerce operators in relation to the supply of goods made by unregistered persons. The key provisions are as follows:
1. Enrolment Number Requirement: Unregistered persons can supply goods through e-commerce operators only after obtaining an enrolment number from the common portal. This measure aims to ensure that unregistered businesses comply with the necessary registration processes before engaging in e-commerce transactions.
2. No Tax Collection at Source (TCS): In contrast to the previous notification, e-commerce operators are not allowed to collect Tax at Source (TCS) under Section 52 of the CGST Act concerning supplies made through unregistered persons. This exemption streamlines the tax collection process for unregistered suppliers.
3. Electronic Reporting: E-commerce operators are required to furnish all the details of supplies made through unregistered persons in the statement using FORM GSTR-8 electronically on the common portal. This step enhances transparency and simplifies compliance procedures.
Conclusion:
The CBIC’s latest Notification No. 36/2023-Central Taxand Notification No. 37/2023-Central Tax, bring about a simplified special procedure for e-commerce operators dealing with supplies from composition taxpayers and unregistered persons, respectively. These measures aim to streamline tax compliance, enhance transparency, and support the growth of small and medium business houses. As the effective date approaches, businesses are encouraged to familiarize themselves with the changes and seek professional guidance, if needed, to ensure smooth adherence to the new procedures. The CBIC’s proactive steps toward simplification and transparency contribute to a more conducive business environment in India’s dynamic market landscape.
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