- E-Commerce has been defined under Section 2 (44) of the Central Goods and Services Tax Act, 2017 that means the supply of goods and services supplied in the form of digital products and on the digital and electronic platforms.
- E-Commerce has a huge impact in India as the country is moving towards digitalization and online.
- On the other hand, after the implementation of GST in India, E-commerce has also been fallen under the purview of GST.
- The Government has provided several rules and regulations for the E-Commerce platform in order to comply with GST norms.
- The E-Commerce platform has taken tremendous growth over the last years in India.
- Due to the Covid-19 pandemic, a mass number of people have shifted their interest to online shopping websites and making payments for a secure and clean process.
- The person who directly or indirectly owns and operates his business on the digital or e-commerce platform is known as an E-commerce Operator that is explained under section 2 (45) of the CGST Act, 2017.
GST and E-Commerce
- Each person who is having a business on e-commerce websites, he or shall necessarily obtain GST registration not taking into account the value of supply undertaken by him.
- In some cases, the operator of E-commerce supplies, goods, and service by himself, and no facilitator or middlemen is involved between the supplier and the recipient of the goods and services.
- Generally, E-commerce is a medium to carry on as a facilitator between the supplier and the recipient of the goods and services.
- The operator of the E-commerce is not an actual supplier of goods and services but if he is a deemed supplier of services then the same shall be liable for any applicable tax in respect to the supply of goods and services.
Tax Collected at Source of E-commerce
- The operator of the E-Commerce shall be liable for Tax Collected at Source (TCS) under section 53 of the CGST Act, 2017.
- The aforesaid tax shall be collected by an E-commerce operator during the time of paying to the vendor.
- On an important note, in the case where an e-commerce operator is not physically present then the person representing it shall be liable to pay tax on his behalf.
- For the registration process, the operator is asked to obtain Tax Collected at Source (TCS) from those who have mandatorily registered under Section 24 of CGST Act, 2017, as there is no provision for exemption regarding it.
- The tax collected at the source shall be chargeable at the rate of 1% on the net value of the goods or services supplied through the e-commerce operator.
- For every person who is undertaking its business on an e-commerce platform by supplying goods and services then the exemption limit of services shall be 20 lacs.
- There is no exemption in the case of goods.
The requirement for Registration in case of Place of Supply for E-Commerce
- As we all know that GST is called a destination-based tax.
- A person who has applied for the registration shall deduct or collect tax as per the provision of Section 52 in a State or Union Territory where he is not physically present shall provide:
- The name of the State in which the supply is executed
- The name of the State in place of business is located
- The place where goods and services are undertaken or consumed will be taxed so the place from where the goods and services are sold is not relevant.
- Section 52 deals with the Collection of Source that states, every e-commerce operator shall obtain and collect the amount of tax not exceeding 1% of the net value of taxable supplies made by the other suppliers.
- Under CGST and SGST, 0.5% shall be applicable for intrastate supply and 1% IGST shall be applicable for interstate supply.
- GSTR-8 shall be filed by the 10th of each month.
- The Tax Collected at Source (TCS) shall be collected into cash by filing Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) credit received under Services/Return icon on GST Portal.
GST applicable on the returned goods by the Buyer
- On the total net value of the taxable supplies only, the operator shall collect the tax.
- The net value shall denote the aggregate value of taxable goods and services supplied.
- This shall not include the services on which whole tax is paid by the e-commerce operator in a month or by any such person through aforesaid operator decreased by the total value of taxable supplies returned to the supplier in that month.
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