Introduction
In a significant move to streamline tax procedures and promote ease of compliance, the Central Government, based on the recommendations of the GST Council, has issued a notification [Notification No. 36/2023-Central Tax – Dt: 4th August 2023] under Section 148 of the Central Goods and Services Tax Act, 2017. This notification, effective from October 1, 2023, outlines a special procedure for electronic commerce operators involved in facilitating the supply of goods by individuals or businesses paying tax who has registered under composition scheme under Section 10 of the said Act.
Background
The Goods and Services Tax (GST) regime in India is continually evolving to simplify tax processes and foster business growth. This latest notification aims to create a more straightforward and efficient tax mechanism for electronic commerce operators and small-scale suppliers. By doing so, the government aims to promote the digital economy and ease the compliance burden on businesses.
Special Procedure for Electronic Commerce Operators to follow for Composition Dealers:
Under this notification, electronic commerce operators facilitating the supply of goods by individuals or businesses paying tax under composition scheme as per Section 10 of the GST Act will follow a distinct set of rules and procedures:
1. No Inter-State Supply: Electronic commerce operators will not permit any inter-State supply of goods by the registered suppliers utilizing their platform.
2. Tax Collection at Source (TCS): Electronic commerce operators will collect tax at source under Section 52(1) of the GST Act for all supplies of goods made through their platform by the registered suppliers. This tax collected will subsequently be remitted to the government in accordance with the provisions of Section 52(3) of the GST Act.
3. Electronic Reporting: Electronic commerce operators will be responsible for electronically reporting the details of supplies of goods made through their platform by registered suppliers. This reporting will be done by submitting a statement in FORM GSTR-8 on the common GST portal.
Conclusion
This notification represents a significant step forward in making the GST framework more accessible and efficient for both electronic commerce operators and small suppliers. By creating a simplified tax procedure, the government aims to promote digital commerce and improve tax compliance.
The special procedure outlined in this notification ensures that electronic commerce operators play a pivotal role in tax collection and reporting for supplies made by small-scale suppliers. This move aligns with the broader goals of fostering a conducive business environment, encouraging e-commerce growth, and enhancing the ease of doing business in India.
Overall, this development is a testament to the government’s commitment to adapting and refining the GST system to meet the changing needs of businesses in the digital age.
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