Complete guide on E-Commerce under GST
Electronic Commerce or E-Commerce is defined under section 2(44) of CGST Act, 2017 as the supply of goods or services or both, including digital products over digital or electronic network.
Electronic Commerce Operator or E-Commerce operator is defined as any person who owns, operates or manages digital or electronic facility or platform for electronic commerce.
E-commerce includes every services or goods sold over the internet or any other digital network. It includes even services sold online. E-commerce operator is defined as any person who operates the platform. For example, Flipkart, Amazon are few of the operators which will fall under the definition of E-commerce operator. They own the platform for allowing traders to sell their products online.
Whether Registration under GST is mandatory for E-commerce operator?
Yes, whether you have just started your portal or own an existing E-commerce portal, GST registration is compulsory.
Section 24 of CGST Act,2017 defines the suppliers who are required to obtain registration regardless of applicability of section 22.
Clause (x) of section 24, specifies every E-Commerce operator to take registration.
GST has introduced the concept of Tax Collection at Source for E-Commerce operators. Every E-commerce operator is required to collect Tax at source from the payment made to their sellers selling goods or services through portals operated by them.
What is Tax collection at Source and what are the provisions applicable to E-commerce operators?
Tax Collection at source is not defined under the Act, but it is an amount which needs to be collected from the payments made to sellers on portal.
Every electronic commerce 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.
- Every E-commerce operator is required to collect tax at source ( TCS ) regardless of turnover or supply made through the portal.
- It is not applicable if operator is operating as an agent.
- The rate is not specified but it will not be more than 1%.
- TCS is applicable only when the payment from customer is received by portal and then passed on to seller, when seller directly receives payment from customer, this provision is not applicable.
- The TCS should be made on the net value of taxable supplies, net value is the total value of sales made on the portal minus sales returns during the month.
What is the due date of paying the TCS to government and whether any return needs to be filed?
The due date to pay the TCS to government is 10th of every month following the taxable month. For example, Tax collected in the month of October should be deposited by 10th November.
Every operator is required to file a monthly return (details of supplies) within 10 days after completion of month, the return should contain information such as details of outward supplies of goods or services or both effected through it, including the supplies of goods or services or both returned through it, and the amount collected as TCS.
Every operator also needs to file an annual statement containing the details of outward supplies of goods or services or both effected through it, including the supplies of goods or services or both returned through it, and the amount collected under the said sub-section during the financial year.Due date to file annual statement is 31st December every year.
The monthly return can be revised any time before filing of return for the month of September or filing of annual return, whichever is earlier. If there is any mistake in return, and output tax was paid less, then return should be revised along with payment of interest.
For example, return filed for the month of January can be revised before operator files the return for the month of September or annual return. If annual return is filed on 15th July then return of January can revised before 15th July.
Details uploaded by E-commerce operator should be matched with details uploaded by online sellers. If any discrepancy is found in details, return should be revised after paying the extra tax and interest as applicable.
Any officer not below the rank of Deputy Commissioner may serve a notice to an operator for following details:
- Supplies of goods or services or both effected through such operator during any period; or
- Stock of goods held by the suppliers making supplies through such operator in the godowns or warehouses, by whatever name called, managed by such operator and declared as additional places of business by such suppliers, as may be specified in the notice.
Operator to whom notice is served is required to provide the details within 15 days from the date of service of notice.
If details are not provided, then penalty which may extend to 25,000 may be imposed on operator.
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