Introduction: In the rapidly evolving landscape of e-commerce, adherence to Goods and Services Tax (GST) regulations is paramount. Recent amendments, particularly regarding composite taxpayers working with e-commerce operators, have significant implications. Let’s delve into the specifics of these changes and the compliance requirements for e-commerce entities.
Latest Update:- Allowing a person registered under composition scheme to sell goods through e-commerce operators:
Amendment in section 10 of the GST Act,2017 (composition levy):-
1.Composite taxpayers in India are allowed to work with e-commerce operators for intra-state supply only as of October 1, 2023, and they are not need to register for GST.
2. With this approach, composite taxpayers who join e-commerce platforms are no longer required to register for GST.
3. It is the responsibility of e-commerce operators to collect Tax Collected at Source (TCS) and record the information of these participants in GSTR 8.
4. It is the responsibility of online retailers to guarantee that these users are solely assisted with intrastate purchases.
5. Composite taxpayers who join e-commerce platforms without registering for GST will be assigned enrollment numbers.
6. They are nonetheless subject to the threshold restrictions of ₹20 lakhs or ₹10 lakhs, respectively, and must register for GST if their total revenue exceeds these limits.
Let’s understand the specific GST compliance requirements for e-commerce operators and sellers.
A. Meaning of E-commerce: section 2(44) – supply of goods and services or both, including digital products over digital or electronic network.
B. E-commerce operator: section 2(45) – Any person who owns, operates or manages digital or electronic facility or platform for electronic commerce .
Registration requirement for E-commerce operator and Seller:
1. E-commerce operator – E-commerce operator are required to be compulsorily registered under section 24(ix) of GST Act.
2. Sellers – as per section 24(ix) every person supplying goods or service through electronic commerce operator are required to be compulsorily registered , irrespective of Turnover limit.
Person making supplies of services through E-commerce operator and having an aggregate turnover less than twenty lakh rupees in a financial year are exempt to take registration.
Exception – Not applicable to services mentioned under Section 9(5)
|
Description/type of Supply |
Threshold limit exemption Applicable | Registration Mandatory (Yes or No) | Person liable to pay GST |
| Supply of Goods | No | Yes | Supplier of Goods –FCM (Forward charge mechanism) |
| Supply of Services | Yes | Yes(Only when Turnover exceeds Rs.20 Lakhs) | Supplier of Service –FCM (Forward charge mechanism) |
| Supply of passenger transportation services | Not required | Not required | E-commerce operator RCM (Revers charge Mechanism) Example – OLA / Uber |
| Supply of Housekeeping services | Yes | Yes(Only when Turnover exceeds Rs.20 Lakhs) | In case of unregistered supplier – E-commerce operator RCM (Revers charge Mechanism) In case of registered supplier – Supplier of service will be liable to pay the GST |
| Supply of Accommodation services | Yes | Yes (Only when Turnover exceeds Rs.20 Lakhs) | In case of unregistered supplier – E-commerce operator RCM (Revers charge Mechanism) In case of registered supplier – Supplier of service will be liable to pay the GST Example – Oyo |
Example:
Selling through E-commerce website – Basically there are 4 Parties involved
1. Supplier (From whom seller purchases goods)
2. Seller (who sales the goods through Ecommerce)
3. Ecommerce (Website e.g. Amazon)
4. Customer
Seller bought some shirt worth Rupees 300/- From Supplier and paid 18% GST on the same i.e. Rs. 54/- and He sold the goods to customer through AMAZON (E-commerce website) for Rupees 1180/-
(Including GST of Rs. 180/-)
| Particulars | Amount |
| Sale Value of shirt | 1000 |
| GST charged On T-shirt at the time of Supply @ 18% | 180 |
| Total value Paid by Buyer | 1180 |
| Commission Charged from seller by Amazon | 200 |
| GST on Commission charged by Amazon @18% | 36 |
| Total Amount of Commission | 236 |
| Amount Paid BY Amazon To Seller of Goods (1180-236) | 944 |
GST Payable by Seller:
| Particulars | Amount |
| GST charged to Buyer of shirt | 180 |
| Less- input Tax credit (GST paid to supplier ) | (54) |
| Less – GST paid on commission charges | (36) |
| Net GST payable | 90/- |
Conclusion: The amendments to the GST Act, 2017, regarding composite taxpayers collaborating with e-commerce operators represent a pivotal shift in regulatory dynamics. By exempting certain sellers from GST registration and outlining clear responsibilities for operators, these changes aim to streamline compliance while ensuring tax transparency in the digital marketplace. As e-commerce continues to thrive, a nuanced understanding of GST obligations becomes indispensable for operators and sellers alike, fostering a fair and sustainable ecosystem.
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We are open for comments and suggestions. The above article has been prepared as by Ms. Laxmi Malge (laxmikmalge123@gmail.com) and reviewed by Mr. Suyash Tripathi (suyash.tripathi@abacussolutions.co.in)
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