Introduction
E-commerce has taken the business world by storm, and regulatory frameworks are evolving to keep pace. In India, Section 9(5) of the Central Goods and Services Tax (CGST) Act, 2017, provides vital guidelines regarding the tax responsibilities of e-commerce operators (ECO). This article offers a comprehensive review of this section and its associated notifications to help you understand the tax obligations for e-commerce businesses registered under the Goods and Services Tax (GST).
The section iterates that , The Government may, via notification,
- specify categories of services the tax on intra state supplies of which
- shall be paid by the electronic commerce operator if such services are supplied through it, and
- all the provisions of this Act shall apply to such ECO as if he is the supplier liable for paying the tax in relation to the supply of such services
Provided that,
Where an ECO does not have a physical presence in the taxable territory, any person representing such ECO for any purpose in the taxable territory shall be liable to pay tax
Provided further that,
where an ECO does not have a physical presence in the taxable territory and also he does not have a representative in the said territory, such ECO shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax.
Notification 17/2017, dated 27th July, 2017
Important facts regarding E commerce operators registered under GST
- Services attracting applicability of Sec 9(5):Passenger transport services; Housekeeping services; Restaurant services; Accommodation services.
- Section 52: TCS to be collected by the e-commerce operator @1% on the net value of taxable supplies made by other suppliers through it. For this, E Commerce operator has to get a GSTIN (other than the ordinary GSTIN) from the GST portal, in order to collect TCS on E commerce platform sales.
- Section 24: Compulsory Registration under GST of the E commerce operator required.
- Return Filing: Form GSTR-8 has to be filed every month on 10th of the following month by the e-commerce operator. It goes with the details of Outward supplies as well as TCS collected on them. The annual return form for E com Operators in GSTR-9A.
- Charge of Tax: Even if the original supplier is not registered under GST, the E commerce operator will charge GST on the supplies, as if it were the case of RCM. Also, the E commerce operator itself will be issuing the GST invoice upon outward supply.
- Penalty: Finance Act 2023 proposed a penalty upon E com Operators of Rs. 10,000, if they allow
- Allow an unregistered persons to sell goods or services or both through the operator except when they are exempt.
- Allow any GST-registered person from supplying outside their registered state any goods or services via the operator where they are ineligible to do so.
- Operator do not file accurate GSTR-8 for information on the online sale through them by e-tailers except persons exempted from GST registration.
Definitions under CGST Act, 2017
- Section 2 (44) : E-COMMERCE: the supply of goods or services or both, including digital products over digital or electronic network.
- Section 2 (45) : E-COMMERCE OPERATOR: any person who owns, operates or manages digital or electronic facility or platform for electronic commerce.
- Section 2(98): Reverse Charge Mechanism: the liability to pay tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both under sub-section (3) or sub-section (4) of section 9, or under sub-section (3) or sub- section (4) of section 5 of the Integrated Goods and Services Tax Act.
- Section 2(107): Taxable Person: a person who is registered or liable to be registered under section 22 or section 24.
Author Bio
annual return = GSTR-9B for ECO