Introduction

The trend of selling goods & services online has seen a boost like never-before. It is convenient & economical to sell online and one could take up this business even along-with their ongoing profession/business or Job.

The government has also realized the potential of the online ecosystem and that is why we have been seeing introduction of various tax compliances on online businesses time & again.

In this article, we will primarily discuss on how a Seller on E-commerce portal could file their GST returns and also on some recent compliance that has been made applicable.

Types of Online Sellers

There could be broadly 2 types of online sellers

  • E-commerce operator: These are the platform owners who provide online selling platforms for sellers & service providers to sell their goods & services. Some popular E-commerce operators are: Amazon, Flipkart, Snapdeal, Play-store etc.
  • Sellers on E-commerce Portal: These are the sellers who register themselves on the E-commerce platforms to sell their goods & services to the consumers. In this article, we are primarily addressing on how these sellers could file their GST returns

Also read: How to become an online seller

Before we begin with the return filing process. Let’s discuss about some of the recent compliances which impacts the online Ecosystem

1. TCS @ 1% under GST on online selling: E-commerce operators are required to deduct 1% TCS on sales generated by the sellers on their platforms. 

2. Introduction of TDS (under income tax): The budget 2020 proposed to levy TDS @ 1% on payments made towards supply of goods or services facilitated through e-commerce platforms, if the gross payment exceeds Rs 5 lakh a year.

The rationale behind the above deductions is pretty clear, the government wants to keep a track of online business. Since, there would be TCS under GST and TDS under income tax, one needs to file their GST & income tax returns accurately to avoid any tax complications

Also read: Tax implications on drop-shipping business in India

Which GST returns are required to be filed by the online sellers?

Currently like all other sellers, online sellers too are required to file GSTR 3B on a monthly basis and GSTR 1 on monthly or quarterly basis (depending upon the turnover). Those with annual turnover beyond 1.5 crores are required to file GSTR-1 monthly.

Also, since, e-commerce operators are collecting TCS on monthly basis, this can also be claimed by the online sellers on a monthly basis and could be used in settlement of GST output tax liabilities.

How to file the GST returns by online seller?

Unlike the normal sellers, who normally get their books of accounts written through accounting software, online sellers might not be using any accounting software or might not even getting their accounting done.

The accounting software, would normally provide the requisite date & reports to file the required GST returns & required reconciliation can also be done easily.

Fortunately, for online sellers, the e-commerce platforms provide the reports based on GST which can be used to file the GST returns.

GST based reports are provided by all major E-commerce platforms like Amazon, Flipkart, Snapdeal. Also, they provide the commission invoices and other useful reports which could be used for reporting & reconciliations as well. However, it is always recommended that these reports be reconciled with the books of accounts for any discrepancies before filing the GST returns.

How to use the reports to file the GST

These reports basically have the details of the Supplies, returns, cancellation etc. made by the seller. Some of the e-portals even provide the reports based on the tables/sections required in the GST return.

DisclaimerThe above post is only for the purpose of academic discussion and should not be construed as any legal opinion in any matter whatsoever.

The author is a CA in practice at Delhi and can be contacted at: E-mail: abhinandansethia90@gmail.com, Mobile: +91-9811741451

Author Bio

Qualification: CA in Practice
Company: Abhinandan Sethia & Associates
Location: west delhi, New Delhi, IN
Member Since: 26 May 2018 | Total Posts: 38
I am a Practicing Chartered Accountant with over 5 years of professional service experience. My professional services experience include specialization in #GST compliance #Risk based Internal Audits #Risk Management, #business process reviews, #Fraud Investigations etc. among other services View Full Profile

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One Comment

  1. Sri says:

    Hi, very informative article. For ecommerce sellers, while filing GSTR-1, do we need to provide the ecommerce operator GST number as well? This provision is present in b2b and b2c sheets of GSTR1 excel, but it is not clear on whether this should be used or not.

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