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Place of supply in respect of Goods sold through E-commerce operator under GST

This article discusses in detail about the issues a supplier is facing on taxability nature of GST on goods sold through E-commerce, its place of supply, its importance & GSTR-1 reporting issues

Introduction: This article discusses in detail about the issues a supplier is facing on taxability nature of GST on goods sold through E-commerce, its place of supply, its importance & GSTR-1 reporting issues.

Q1. Whether E-commerce operator (ECO) like FILPKART, AMAZON, SNAPDEAL is to be considered as agent of the manufacture / trader & provisions of section 10(1)(b) of IGST Act, 2017 as applicable to Bill to – Ship to transactions shall apply?

Ans. Sec. 2(45) of CGST Act, defines the term “electronic commerce operator” as any person who owns, operates or manages digital or electronic facility or platform for electronic commerce;

Sec. 2(45) of CGST Act, defines the term “ Electronic commerce” as means the supply of goods or services or both, including digital products over digital or electronic network.

The ECO cannot be considered to acting as agent or otherwise as required by section 10(1)(b) of IGST Act, 2017.

To clarify this point, attention is invited to the opening lines of section 52(1) of CGST Act, which provides that:

Notwithstanding anything to the contrary contained in this Act, every electronic commerce operator (hereafter in this section referred to as the “operator”), not being an agent, shall collect an amount calculated at such rate not exceeding one per cent., as may be notified by the Government on the recommendations of the Council, 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. ”

From the above, it may construed that the ECO shall not be agent for the purpose GST.

ECO is an independent service provider and earning commission for the services rendered by it and its primary responsibility is collect TCS @ 1% on 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.

From the above discussion, it is amply clear that the ECO is not working in the capacity of agent or otherwise. It is only providing the online market place services and earning subscription fees or commission on the sale value from the listed sellers.

So the provisions of section 10(1)(b) of IGST Act, i.e. bill to – ship to provisions are not applicable to ECO.

Q2. In above situation, how to determine place of supply in goods are sold by a manufacture / trader through E-commerce operator (ECO) & how to report these supply in monthly GSTR-1?

Ans. In continuation with answer to Q1, the subject transaction involves below 3 parties:

  1. Seller;
  2. Buyer;
  3. ECO

And it involves below 2 types of transaction:

  1. Between Seller & Buyer – Sale of Goods ;
  2. Between Seller & ECO – Provision of market place service.

For answering subject question, we shall be concentrating only on Ist type transaction i.e. transaction between seller & buyer – sale of goods

The seller shall discharge his GST liability on full value of sales made to the buyer as is being done in normal sale.

The place of supply of goods shall be as per section 10 & 11 of IGST Act, 2017 except section 10(1)(b) as bill to – ship to provisions are not applicable in the given case.

How to report in taxable outward supplies done through ECO in monthly GSTR-1

1. Taxable outward supplies made to registered persons through ECO is to be reported in point no. 4C of GSTR-1 for every ECO & rate wise showing below details:

a. GSTIN of ECO

b. GSTIN / UIN of every buyer

c. Invoice details

d. Tax rate

e. Taxable value

f. Tax amount

g. Place of supply

2. Taxable outward inter-state supplies made to unregistered persons (where the invoice value is more than Rs. 2.5 Lakhs) through ECO is to be reported in point no. 5B of GSTR-1 for every ECO & rate wise showing below details:

a. GSTIN of ECO

b. Invoice details

c. Tax rate

d. Taxable value

e. Tax amount

f. Place of supply

3. Taxable outward inter-state supplies made to unregistered persons (where the invoice value is upto Rs. 2.5 Lakhs) through ECO is to be reported in point no. 7B of GSTR-1 for every ECO & rate wise showing below details:

a. GSTIN of ECO

b. Consolidated rate wise outward supply

c. Tax rate

d. Taxable value

e. Tax amount

f. Place of supply

4. Taxable outward intra-state supplies made to unregistered persons through ECO is to be reported in point 7A(2) of GSTR-1 for every ECO & rate wise showing below details:

a. GSTIN of ECO

b. Consolidated rate wise outward supply

c. Tax rate

d. Taxable value

e. Tax amount

The author is a practising CA and is registered Insolvency Professional. He can be reached at cavinodchaurasia@gmail.com , Mob. +91 9953587496.

View Comments (6)

  • SIR WHAT IF I AM A SUPPLIER SUPPLYING THROUGH AMAZON A PRODUCT WORTH M.R.P. OF 2000.
    BUT AMAZON PAYS AFTER DEDUCTING ITS COMMISSION 1500 ONLY.
    ON WHAT IS THE GST TO BE PAID BY THE SUPPLIER?

    • on Rs. 2000 GST shall be paid.

      Rs. 500 is commission to Amazon is inward supply for you on which amazon shall charge gst to you. the credit of which you may claim.

  • Really good piece of information which is hard to find anywhere on the internet. Thanks for the effort made buy Mr. Vinod Chaurasia.
    I have one typical question, for which I did not find the answer here:
    If I sell my product to an unregistered person (for example, residing at ahmedabad in Gujarat) through an ECO (for example - whose registered address is of haryana), then what will be the place of supply in that case. Will it be Gujarat or Haryana?

    • Place of buyer shall be the place of supply as it involves of movement of goods as per section 10(1)(a) of IGST Act.

  • I SELL ITEMS THROUGH EBAY AND ALL MY CUSTOMERS ARE OUTSIDE INDIA(I AM DOING EXPORT THROUGH EBAY).
    WHAT SHALL BE POS AND WHRE IS SHALL BE REPORTED

  • Hello Sir, I like to know in Amazon there are Customer whose bill to address under Sale Invoice are of United States and they are shipping product to Gujarat. What will be the place of supply in this case. It's an actual scenerio I am facing. Many times some customer residing in US send gifts to person address residing in India. Please resolve this issue as TCS going to be implemented soon. I was googling around and reach your site, your above article is close to my query. Thank you

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