Important Definition under GST law:
(i) Section 2: Definitions
Section 2(41)-electronic commerce means supply of goods and/or services including digital products over digital or electronic network.
Section 2(42)-electronic commerce operator means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce.
Detail Analysis of Definition:
Electronic Commerce: Under this definition only “supply” is considered (vendors registered on various e-commerce platform).
It means if someone is manufacturing and supplying its own will not fall under this definition.
Electronic Commerce Operator: It is like a mediator , which brings supplier and buyer together. Example: Flipkart, Amazon
Section 56. Collection of tax at source:
(1) Notwithstanding anything to the contrary contained in the Act, every electronic commerce operator (hereinafter referred to in this section as the “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.
Explanation.- For the purposes of this sub-section, the expression “net value of taxable supplies” shall mean the aggregate value of taxable supplies of goods or services, other than services notified under sub-section (4) of section 8, made during any month by all registered taxable persons through the operator reduced by the aggregate value of taxable supplies returned to the suppliers during the said month.
(2) The power to collect the amount specified in sub-section (1) shall be without prejudice to any other mode of recovery from the operator. *The amount collected under sub-section (1) shall be paid to the account of the appropriate Government by the operator within ten days after the end of the month in which such collection is made in the manner as may be prescribed.
(3) Every operator who collects the amount specified in sub-section (1) shall furnish a statement, electronically, containing the details of outward supplies of goods or services effected through it, including the supplies of goods or services returned through it, and the amount collected under sub-section (1) during a month, in such form and manner as may be prescribed, within ten days after the end of such month.Online GST Certification Course by TaxGuru & MSME- Click here to Join
(4) The supplier who has supplied the goods or services through the operator shall claim credit, in his electronic cash ledger, of the amount collected and reflected in the statement of the operator furnished under sub-section **(4), in the manner prescribed.
(5) The details of supplies furnished by every operator under subsection **(4), shall, in the manner and within the period prescribed, be matched with the corresponding details of outward supplies furnished by the concerned supplier registered under the Act.
(6) Where the details of outward supplies furnished by the operator under sub-section **(4) do not match with the corresponding details furnished by the supplier under section 32, the discrepancy shall be communicated to both persons in the manner and within the time as may be prescribed.
(7) The amount in respect of which any discrepancy is communicated under sub-section **(7) and which is not rectified by the supplier in his valid return or the operator in his statement for the month in which discrepancy is communicated, shall be added to the output tax liability of the said supplier, where the value of outward supplies furnished by the operator is more than the value of outward supplies furnished by the supplier, in the manner as may be prescribed, in his return for the month succeeding the month in which the discrepancy is communicated.
(8) The concerned supplier shall, in whose output tax liability any amount has been added under sub-section **(8), be liable to pay the tax payable in respect of such supply along with interest, at the rate specified under sub-section (1) of section 45 on the amount so added from the date such tax was due till the date of its payment.
(9) Any authority not below the rank of Joint Commissioner may serve a notice, either before or during the course of any proceeding under this Act, requiring the operator to furnish such details relating to—
(a) supplies of goods or services effected through such operator during any period, or
(b) stock of goods held by the suppliers making supplies through such operator in the godowns or warehouses, by whatever name called, managed by such operators and declared as additional places of business by such suppliers as may be specified in the notice.
(10) Every operator on whom a notice has been served under section **(10) shall furnish the required information within fifteen working days of the date of service of such notice.
(11) Any person who fails to furnish the information required by the notice served under sub-section **(10) shall, without prejudice to any action that is or may be taken under section 85, be liable to a penalty which may extend to twenty-five thousand rupees.
Analysis of section 56 with the help of an example:
Rashmi is registered as a supplier on ABCkart, which is a electronic commerce operator.
1. Now in the month of July-17 Rashmi has made total taxable supply of Rs.2lakh, and return which happened in the month of July is 0.5lakh. Thus the net value of taxable supplies made through ABCkart will be 1.5lakh.
2. ABCkart will deducted TCS @1% i.e. 1500, provided Rs 1.5lackh is collected by ABCkart. 1500 will be paid by ABCkart to appropriate government by 10th of August 17.
3. ABCkart will furnish a statement, electronically, containing the details of outward supplies of goods or services (2 lakh) effected through it, including the supplies of goods or services returned through it(0.5 lakh), and the amount collected(1500) during a month, in such form and manner as may be prescribed, within ten days after the end of July i.e. 10th August.
4. Rashmi shall claim credit, in her electronic cash ledger, of Rs.1500,as collected and reflected in the statement furnished by ABCkart.
5. Now the details furnished by both ABClkart and Rashmi will be matched. If there is no difference in the details furnished all is fine, and Rasmhi will be given credit of Rs. 1500.
What if furnished details do not match???
6. the discrepancy shall be communicated Rashmi and ABCkart in the manner and within the time as may be prescribed.
7. And if the discrepancy communicated is not rectified either by Rashmi or ABCkart in the return for the month in which discrepancy is communicated, any difference in the amount of supply shall be added to tax liability of Rashmi along with interest at the rate as prescribed in relevant provision.
For example details furnished as per Rashmi shows taxable supply of Rs. 1.2 lakh, now in this case there is additional liability on Rashmi to pay tax and interest on Rs. 0.3 Lakh (1.5-1.2).
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