E-commerce and E-commerce operator plays a vital role in Today’s market scenario, the related provisions applicable on E-commerce operator under GST are as follows:

What is electronic commerce and electronic commerce operator (ECO)?

“Electronic commerce” means the supply of goods or services or both, including digital products over digital or electronic network – section 2(44)

“Electronic commerce operator” means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce – section 2(45)

Registration of e-commerce operator:

The Registration provisions for E-commerce operator or the person supplying through E-commerce platform are as follows:

  • Compulsory Registration for ECO: Every electronic commerce operator has to compulsorily register as per provisions of section 24(x) of CGST Act, 2017. The benefit of threshold limit of Rs. 20 lakh (Rs. 10 lakh for special category states except J & K) is not applicable to them.
  • Person who are required to pay tax under sub-section (5) of section 9 has to compulsorily register as per provisions of section 24(iv).
  • Compulsory Registration for person supplying through ECO: Persons who supply goods or services or both, other than supplies specified u/s 9(5), through such electronic commerce operator who is required to collect tax at source under section 52 has to compulsorily register as per provisions of section 24(ix). However, the persons making supplies of services, other than supplies specified under subsection (5) of section 9 is allowed to take benefit of threshold limit vide Notification No. 65/2017 – Central Tax dt 15/11/2017.

Restriction on Composition dealer: Person who is engaged in making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52 can’t take registration under composition scheme u/s 10.

Specified Services u/s 9(5) of CGST Act and u/s 5 (5) of IGST Act

In respect of specified services, tax shall be paid by the ECO on behalf of the service suppliers if such services are supplied through it and all the provisions of the Act shall apply to such ECO as if he is the supplier liable to pay tax in relation to the supply of such services. The Government has notified following categories of services, the tax on intra-State/ inter-state supplies shall be paid by the ECO –

 S. No. Description of supply of Service  Supplier of service Person Liable to Pay GST Notification No.
 1 Transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle Any person E-commerce operator Notification No. 17/2017-Central Tax (Rate) dt 28th June, 2017

Corresponding IGST Notification No. 14/2017-Integrated Tax (Rate) dt 28th June, 2017

 2 Providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes Any person except who is liable for registration under sub-section (1) of section 22 of the said CGST Act E-commerce operator –do–
 3 Services by way of house-keeping, such as plumbing, carpentering etc Any person except who is liable for registration under sub-section (1) of section 22 of the said CGST Act E-commerce operator Inserted vide Notification No. 23/2017-Central Tax(Rate) dated 22nd Aug, 2017

Corresponding Notification No. 23/2017-Integrated Tax (Rate) dated 22nd Aug, 2017

Furthermore, above mentioned suppliers of services covered u/s 9(5) are exempted from compulsory registration and can take benefit of threshold limit.

Collection of tax at source (Section-52)

Every electronic commerce operator, not being an agent, shall collect TCS at such rate not exceeding 1% (1% CGST  + 1% SGST), of the net value of taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the operator.

ECO should make the tax collection during the month in which the consideration amount is collected from the recipient. The amount of TCS collected by the ECO is to be deposited to the Government and ECO is required to furnish a statement in Form GSTR-8, electronically within 10 days after the end of the month in which amount was so collected.

Provisions of this section have been deferred till 30th June, 2018 vide Press release dated 10th March, 2018.

Levy and collection

Every e-commerce transaction involves below three parties and two types of transactions:

1. Seller;

2. Buyer;

3. ECO.

Types of transaction:

1. Between Seller & Buyer – Sale of Goods ;

2. Between Seller & ECO – Provision of market place service.

GST shall be levied on both transactions:

  • Between seller & buyer: GST on entire value of goods/ services supplied (GST shall be paid by the supplier except in case of services specified u/s9(5))
  • Seller & ECO: GST on commission value/ other charges earned by ECO for providing market platform to seller. (GST shall be paid by the ECO)

Where an electronic commerce operator does not have a physical presence in the taxable territory, then any person representing him for any purpose in the taxable territory shall be liable to pay tax, and if he neither have a physical presence in the taxable territory nor have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax.

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7 Comments

  1. Kinjal says:

    Thank you so much sir or mam…your article on ECO is very helpfull to me…and very much easy and valuable to understand…this would very helpfull to me for studying final exams…thank you so much..😊

  2. Prof. Joginder Singh Yadav says:

    dear your artical on Electronic Commerce Operator (ECO) is very valuable for me because i belong to teaching community and i have to taught this topic to my B.Com final year students. this was not so explained any other publications which i read. thanks and congratulation for such a good artical.

  3. Somesh Kabra says:

    is interstate supply of services through ECO liable for compulsory registration as becoz there is notification for T/o limit for ONLY intra state supplies whereby to interstate supply of service T/o limit is applicable

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