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CA Dilip Jain

CA Dilip JainIntroduction : E Commerce in India is one of the most growing market in India in Recent Years . India is adding three new Internet users every Second. E commerce companies have the potential creating 12 million Jobs in Next 10 Years. The unprecedented growth of the e commerce sector has been largely driven by Rapid Technology adoption and access to Internet through broadband, 3G, 4G etc. The explosive growth in the e commerce sector sector has given rise to Multiple Tax Issues. Disputes have been arisen in case of e commerce Companies that Undertake Storage of goods procured from various sellers in their warehouse Would fall under ambit of VAT/CST. Vat authorities are of View that e commerce companies are involving in Supplying and distribution of goods therefore would qualify as Dealer. Therefore they are liable to VAT. Some states are also Charging Entry Tax for delivering products to Customer in their state. Further levy of Service Tax on E Commerce transaction Under Aggregator Model has been brought into with effect from 01.03.2015.

Current Tax Structure :

1. Vat/CST On E-Commerce Transaction.

2. Service Tax on E-Commerce Transaction

3. Entry Tax on E-Commerce Transaction

4. Equalization Levy

POST GST Implementation :

• Section 8(4) – The Central or a State Government may, on the recommendation of the Council, by notification, specify categories of services the tax on 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 electronic commerce operator as if he is the person liable for paying the tax in relation to the supply of such services.

• Thus, The Liability to pay GST would be on the E-Commerce Operator only for the services provided through it and this is not for supply of goods through such operator.

• Under Service Tax E Commerce Operator liable to pay ST only when service is provided under brand name of Operator. Under GST, Whether Service is provided in their own brand or under the brand of operator still operator shall have to pay GST.

• Where an Electronic Commerce Operator does not have a Physical Presence in the taxable territory, any Person Representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay Tax.

• Where an electronic commerce operator does not have a physical presence in the taxable territory and also he does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax.

• Section 56: Every electronic commerce operator, not being an agent, shall collect an amount calculated at the rate of one percent of the net value of taxable supplies made through it where the consideration with respect to such supplies is to be collected by the operator.

• The amount collected shall be paid to the Government within 10 days after the end of the month in which such collection is made.

• Every Operator shall submit a statement electronically containing the details of outward supplies of goods and services effected through it.

• The supplier who has supplied such goods through the operator shall be eligible to claim Credit.

• Schedule V: As Per Schedule V following persons shall be required to registered under this act :

  • Persons who are required to collect tax under 56, whether or Not separately registered under the Act
  • Persons who supply goods and/or services, other than supplies specified under sub-section (4) of section 8, through such electronic commerce operator who is required to collect tax at source under section 56, irrespective of the threshold
  • Every electronic commerce operator, irrespective of the threshold Limit of Registration.
  • Every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person;

• GST Return : Furnishing a Statement in Form GSTR -8.

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April 2024