Introduction

The day GST came into the market, it has stormed all the existing sectors in India. By dismantling all the inter-state barriers with respect to trade, the single biggest indirect tax regime kicked into force. It also had huge imapct on e-commerce industry in India. Electronic commerce or e-commerce (EC) means the supply of goods and services or both, including digital products over digital or electronic network.

To understand the changes in E-commerce more precisely, here we are providing all the questions you might have in your mind regarding e-commerce under GST.

Q-1  Who is e-commerce operator?

Any person who owns, operates or manages digital or electronic facility or platform for electronic commerce will be called as e-commerce operator.

Q-2  Is GST registration is mandatory for e-commerce operator?

YES! It is mandatory for e-commerce operator. An e-commerce operator is exempted from the benefit of threshold as it is not available for them. Irrespective of the value of supply made by them they are liable to registered.

Q-3  A person who is supplying goods and services through e-commerce operator is entitled to threshold limit?

Threshold exemption is not available to such persons and they would be liable to be registered irrespective of the value supply made by them. The requirement is applicable only if the supply is made through e-commerce operator who is required to collect tax. The e-commerce operators are liable to pay tax under a notification is issued on the behalf of suppliers. Suppliers of such services are entitled to threshold exemption.

Q-4  Will an e-commerce operator be liable to pay tax in respect of supply of goods or services made through instead of actual supplier?

YES! The tax shall be paid by the e-commerce operator if such services are supplied through it. All the provision of act shall apply to the e-commerce operator as if he is the supplier liable to pay tax in relation to the supply of such services.

Q-5  Will threshold exemption be available to electronic commerce operators liable to pay tax on notified services?

NO! It is not available.

Q-6  It has bee seen that it’s very common that customers of e-commerce companies return goods. How will be the adjustment of these returns is managed?

Collection of tax depends upon the net value of taxable supplies. which is required by an e-commerce company.  We can say that value of supplies which are returned are adjusted in the aggregate value of taxable supplies.

Q-7  What is “net value of taxable supplies”?

The Aggregate value of taxable supplies of goods or services or both, other than the services on which entire tax is payable by the e-commerce operator, made during any month through such operator by registered perason which further reduced by the aggregate value of taxable supplies returned to the suppliers during the said month.

 Q-8  Is every e-commerce operator required to collect tax on behalf of actual supplier?

YES! Every e-commerce operator required to collect tax on behalf of actual supplier.

Q-9  At what time an e-commerce operator should make such collection?

It should be made during the month in which the consideration amount is collected from the recipient.

Q-10  What is Tax Collection Source (TCS)?

TCS is the amount collected by the e-commerce operator at the rate of one percent (0.5% CGST + 0.5% SGST) of
the net value of taxable supplies made through it, where the consideration with respect to such supplies is to be collected by such operator.

Q-11  What is the time within which such TCS is to be remitted by the e-commerce operator to Government?

Within 10 days after the end of the month in which amount was so collected.

Q-12  How can actual suppliers claim credit of this TCS?

On the basis of statement filed by the operator to the government, it will be reflected in GSTR-2 of the actual registered supplier. At the time of discharge of tax liability in respect of the supplies made by the actual supplier can be used.

Q-13  Is any kind of statement has to made or submit by an e-commerce operator? If yes then what are the details are required to be submitted in the statement?

YES! Yes ! Electronically every operator is required to furnish a statement containing details of outward supplies of goods and services of goods or services affected by it. It also includes the supplies of goods and services returned through it and the also he amounts collected by it as TCS during a month within 10 days after the end of such month. The statement has to file in FORM GSTR-8. An annual statement is also required to be filed by the operator by 31stday of December following the end of the financial year in which the tax was collected.

Q-14  How the concept of matching in e-commerce provisions works?

Every operator furnishes the details of supplies in his statement for the month. It will be matched with the corresponding details of outward supplies furnished by the concerned supplier in his valid return for the same month or any preceding month. If the details of outward supplies declared by the operator in his statement do not match with the corresponding details declared by the supplier then the discrepancy shall be communicated to both persons.

Q-15  What will happen if the details remain unmatched?

If any discrepancy is communicated  with respect of amount and which is not rectified by the supplier in his valid return or the operator in his statement for the month in which discrepancy is communicated shall be added to the output liability of the said supplier in his return for the month succeeding  the month in which the discrepancy is communicated. The supplier whose output tax liability any amount has been added shall be liable to pay the tax payable in respect of such supply along with interest on the amount so added from the date such tax was due till the date of its payment.

Q-16  Are there any powers given to tax officials under the GST Act to seek information on supply/stock details from e-commerce operators?

YES! Within the period of 15 working days, any officer who is not below the rank of deputy commissioner may issue the notice to the e-commerce operator to furnish details from the date of service of such notice.

Q-17  The sellers supplying goods through e-Commerce operators (ECO) may have common places of business, especially if their goods are stored in a shared facility operated by the ECO. This will result in the same additional place of business being registered by multiple suppliers. Is this allowed?

YES! This is allowed as any registered person can declare premises as a place of business if he has requisite documents for use of the premises as his place of business. There is no restriction on the use of premises by multiple persons. The registered person just needs to comply with the requirements of maintaining records.

Q-18  The travel agents who are providing services through digital or electronic platform qualify as ECO’s?

YES! they will fall under the category of ECO’s liable to deduct TCS.

Q-19  In cases where the 2 or more ECO’s are involved then who would deduct TCS?

Each transaction needs to be treated separately and examined according to the provisions in such cases. The deduction of TCS will be made accordingly.

Q-20  There are cases in which the ECO does not provide invoicing solution to the seller. In such cases, invoice is generated by the seller and received by the buyer without ECO getting to know about it. The payment flows through the ECO. In such cases, on what value is TCS to be collected? Can TCS be collected on the entire value of the transaction? 

TCS will be collected on the next taxable value of such supplies in respect of which ECO collects the consideration. The gstr-8 form gives the report of the collected amount and remitted to the Government. The availability of such collected amount will be made available to the concerned supplier as credit in his electronic cash ledger.

Q-21  Sellers who are selling exempted or zero-tax goods like books through ECOs. In such cases, Is TCS is required to collect in the marketplace?

TCS is to be collected on “the net value of taxable supplies” made through an ECO. When the supply itself is not taxable, the question of TCS does not arise.

Conclusion

In case you are confused about GST as a business owner, feel free to consult the GST experts at Legal Raasta. You can get comprehensive assistance on GST Registration and GST Return Filing. You can also use our GST software for doing end-to-end GST compliance.