In current world, a new business concept is introduced E-Commerce. In GST it has been defined and some provisions are added to bring this business under GST.
E-Commerce is defined u/s 43B of GST Act as:
‘electronic commerce’ shall mean the supply or receipt of goods and / or services, or transmitting of funds or data, over an electronic network, primarily the internet, by using any of the applications that rely on the internet, like but not limited to e-mail, instant messaging, shopping carts, Web services, Universal Description, Discovery and Integration (UDDI), File Transfer Protocol (FTP), and Electronic Data Interchange (EDI), whether or not the payment is conducted online and whether or not the ultimate delivery of the goods and/or services is done by the operator.
Act also defines E-Commerce Operator and Agreegartor as follows:
‘electronic commerce operator’ shall include every person who, directly or indirectly, owns, operates or manages an electronic platform that is engaged in facilitating the supply of any goods and/or services or in providing any information or any other services incidental to or in connection there with but shall not include persons engaged in supply of such goods and/or services on their own behalf.
‘aggregator’ means a person, who owns and manages an electronic platform, and by means of the application and a communication device, enables a potential customer to connect with the persons providing service of a particular kind under the brand name or trade name of the said aggregator.
Though an ‘aggregator’ has been separately defined, it could be argued that an aggregator should be covered under the definition of ‘electronic commerce operator’ given that an aggregator is also a person who maintains or operates an electronic platform for facilitating supply of services. The only distinction between an aggregator and other e-commerce operators is that an aggregator provides underlying services under his brand. Consequently, an aggregator would also be required to adhere to the process of tax collection at source and other requisite compliances in the Chapter.
To trace and free flow under GST Act new provision u/s 43C is introduced, which enable to continue the chain of GST.
It brings liability on E-Commerce Operator to deduct an amount of out the amount paid to payable to the supplier, at the time of credit of any amount to the account of the supplier of goods and/or services or at the time of payment of any amount in cash or by any other mode, whichever is earlier,
The amount to be deducted will be same as TDS/TCS under Income Tax Act.
The percentage of amount to be deducted will be expected to be much less than the CGST and SGST i.e. 2% – 4%.
E-Commerce operator will deposit the collected amount and fill a return in GSTR-1, within ten days after the end of such calendar month.
The supplier will be eligible to claim credit of the deducted amount.
Details so furnished by the Operator and Supplier will be matched and discrepancy, if any, will be communicated to both.
Value of a supply relating to any payment in respect of which any discrepancy is communicated will be added to the output tax liability of the supplier, if the same was not rectified by the supplier. Supplier will be liable to pay the tax along with the interest on such value.
E-Commerce Operator has to furnish such details as asked by the concerned officer, not below the rank of Joint Commissioner, in his notice during any proceeding under the Act.
Operator has to submit the required information within 5 working days to the concerned officer, or he will be liable to penalty exceeding Rs. 25000.00.
ONLINE RETAILERS, who supply goods/services on their own behalf are not covered under this definition, as are in general treaded as taxable person, if their aggregate turnover exceeds the threshold limit.
Operator such as Quiker, Olx, merely facilitate suppy, with the payment being directly between supplier and the end customer are not covered under it.
Discounts have been categorized under two heads:
1. Pre supply discount
2. Post Supply discount
What we the treatment of Cash Back Offers, Promo Codes?
Currently, Traders are not able to claim Service Tax paid on Logistics, Commission Etc. and Operator and able to get benefit of VAT paid. So it will end the cascading effect.
Who is not covered?
Online retailers who supply goods/services on their own behalf are not covered under the definition of electronic commerce operator and therefore the process of tax collection at source and other requisite compliances in the Chapter will not be applicable.
No Exemption is provided on basis of turnover i.e Rs. 9.00 or 4.00 Lacs.