Ecommerce is a digital platform where supplier and customer make business transactions digitally. Ecommerce business is going to be popular day by day. It is spreading in vast level. I feel there is no such family spare in urban cities who has not used this ecommerce platform. The digital business is a boon in lock down period and such business is in full boom during this period.
The Legislature has also framed provisions under the GST Law in respect to ecommerce to check upon transactions to be made through ecommerce portal. Such provisions are for registration under GST, for returns to be filed for transactions made through ecommerce and provisions for tax collection at source.
Detailed discussions on ecommerce under GST are as under:
1. What is electronic commerce?
2. What is electronic commerce operator?
3. What are provisions for registration under GST for ecommerce business?
4. Place of Supply for transactions held under e-commerce.
5. Some FAQ on e-commerce operator.
6. Tax Collection at Source (TCS) provisions under GST for ecommerce transactions.
Q 1. What is electronic commerce?
Section 2 (44) of the CGST Act says “electronic commerce” means the supply of goods or services or both, including digital products over digital or electronic network.
Q 2. What is electronic commerce operator?
Section 2 (45) of the CGST Act says “electronic commerce operator” means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce.
Q 3. What are provisions for registration under GST for ecommerce business?
Section 24 of the CGST Act 2017 says about compulsory registration for ecommerce business and ecommerce operator.
Section 24 (ix) says compulsory registration for persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52.
Section 24 (x) says compulsory registration for every electronic commerce operator who is required to collect tax at source under section 52.
1. A person (electronic commerce operator) is not required to collect tax at source under section 52 and
2. A Supplier makes such supplies notified under section 9 (5) of the CGST Act, 2017.
1. TCS is not required to be collected on exempt supplies.
2. TCS is not required to be collected on supplies of services notified under section 9 (5) of the Act.
3. TCS is not required to be collected on supplies on which the recipient is required to pay tax on reverse charge basis.
4. Composition Dealer is not allowed to make supply through the Operator, therefore, question of TCS shall not be arisen.
5. If consideration is not collected by the ecommerce operator on supply made through the portal of the ecommerce operator then TCS is not required to be collected.
6. TCS provisions shall not be applicable on import of goods or services.
7. TCS provisions shall not be applied on supplying his (ecommerce operator) own products.
(i) services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle;
(ii) services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, except where the person supplying such service through electronic commerce operator is liable for registration under sub-section (1) of section 22 of the said Central Goods and Services Tax Act;
(iii) services by way of house-keeping, such as plumbing, carpentering etc., except where the person supplying such service through electronic commerce operator is liable for registration under sub-section (1) of section 22 of the said Central Goods and Services Tax Act.
1. The persons making supplies of services, other than supplies specified under sub-section (5) of section 9 of the said Act through an electronic commerce operator who is required to collect tax at source under section 52 of the said Act, and having an aggregate turnover, to be computed on all India basis, not exceeding an amount of twenty lakh rupees in a financial year, as the category of persons exempted from obtaining registration under the said Act. For special category states aggregate turnover shall be Rs.ten lakh.
2. Ecommerce operator shall have required two registrations under the GST. One is normal registration for his own supply of goods and services and other is required to make compliance towards tax collected at source.
Q 4. Place of Supply for transactions held under e-commerce.
To understand the concept of place of supply on the basis of following examples: –
A supplier of Delhi makes supply through the portal of Flipkart. The Service Provider Flipkart registered in Maharashtra. Following transactions were happened as under:
|Transactions between the Supplier and a Consumer and Deduction of TCS|
|Tran sactions||Supplier of||Consumer of||Place of Supply||GST be charged by the Supplier||TCS be ded ucted by Flipkart|
|First||Delhi||Delhi||Delhi||CGST+SGST||CGST + SGST|
|Transactions between the Service Provider (Flipkart) and the supplier who avails portal services|
|State of the Service Provider (Flipkart)||State of the Supplier (Recipient of the Service)||Place of Supply||GST be charged|
|Maharashtra||Maharashtra||Maharashtra||CGST + SGST|
Q 5. Some FAQ on e-commerce operator.
|1||I am a supplier selling my own products through a web site hosted by me. Do I fall under the definition of an “electronic commerce operator”? Am I required to collect TCS on such supplies||As per the definitions in Section 2 (44) and 2(45) of the CGST Act, 2017, you will come under the definition of an “electronic commerce operator”. However, according to Section 52 of the Act ibid, TCS is required to be collected on the net value of taxable supplies made through it by other suppliers where the consideration is to be collected by the ECO. In cases where someone is selling their own products through a website, there is no requirement to collect tax at source as per the provisions of this Section. These transactions will be liable to GST at the prevailing rates.|
|2||We purchase goods from different vendors and are selling them on our website under our own billing. Is TCS required to be collected on such supplies?||No. According to Section 52 of the CGST Act, 2017, TCS is required to be collected on the net value of taxable supplies made through it by other suppliers where the consideration is to be collected by the ECO. In this case, there are two transactions – where you purchase the goods from the vendors, and where you sell it through your website. For the first transaction, GST is leviable, and will need to be paid to your vendor, on which credit is available for you. The second transaction is a supply on your own account, and not by other suppliers and there is no requirement to collect tax at source. The transaction will attract GST at the prevailing rates.|
|3||Is every e-commerce operator required to collect tax on behalf of actual supplier?||Yes, every e-commerce operator (other than an operator required to pay tax under section 9(5) of the CGST Act, 2017) is required to collect tax where consideration with respect to a taxable supply is collected by such e-commerce operator. (Refer to Section 52(1) of the CGST Act, 2017).|
|4||The sellers supplying goods through e-Commerce operators (ECO) may have common places of business, especially if their goods are stored in a shared facility operated by the ECO. This will result in the same additional place of business being registered by multiple suppliers. Is this allowed?||Yes, this is allowed. Any registered person can declare a premises as a place of business if he has requisite documents for use of the premises as his place of business (like ownership document, agreement with the owner etc.) and there is no restriction about use of a premises by multiple persons. The registered person shall have to comply with the requirements of maintaining records as per section 35 of the CGST Act, 2017 and Rules 56 to 58 of the CGST Rules, 2017. Please note such premises shall be in the same state if the premises is situated in other state, then the registered person shall have to take separate registration.|
|5||GST requires a dealer to maintain a consecutive serial number for invoices. If we are supplying from multiple locations, do we need to centrally maintain the invoice numbers serially?||Section 46 of the CGST Rules, 2017 provides that invoice may have “a consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters hyphen or dash and slash symbolised as “-” and “/” respectively, and any combination thereof, unique for a financial year”. Therefore, a supplier can have multiple series for the same year, so long as the same series is not used across financial years. Therefore, you may have a different invoice series for each location having consecutive serial numbers running across that series.|
Q 6. Tax Collected at Source (TCS) provisions under GST for ecommerce transactions.
Detailed article as “GST Provisions for TCS – Detailed Analysis” is available at https://taxguru.in/goods-and-service-tax/gst-provisions-tcs-detailed-analysis.html
The article contains followings:-
1. Who is liable to collect TCS ?
2. On which supply TCS shall be collected ?
3. What is Net Taxable Value of Supplies for the purpose of TCS ?
4. What are rates of TCS ?
5. What are the provisions of Registration for the Operator and the Supplier ?
6. What are provisions for the Foreign E-Commerce Operator ?
7. On which supplies the Operator shall collect the TCS ?
8. What happened when in a particular period sale return is more than sales ?
9. At what time the Operator shall collect TCS ?
10. What is the time within which such TCS is to be remitted by the Operator to the Government account?
11. Which statements/returns shall be furnished by the Operator and time to furnish such statements/returns ?
12. Amendment provisions in regard of rectification of omission and correction in furnished returns.
13. Claim of credit by the Supplier.
14. Matching Provisions.
15. Additional Powers to the Authorities of GST towards the Operator.
16. Notified Services under section 9 (5) on which TCS shall not be collected but tax shall be paid by the E-Commerce Operator. NOTIFICATION NO. 17/2017-CENTRAL TAX (RATE), DATED 28-6-2017.
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