Meaning of E-commerce & E-commerce Operator
As Per Section 2(44) of CGST Act, 2017, E-commerce means supply of goods or services over electronic network. In Simple terms, buying and selling of products and services by business and consumers through an electronic medium without using any paper document.
As Per Sec. 2(45) of the CGST Act, 2017 E-commerce operator means any person who owns, operates or Manages digital or electronic facility or platform for electronic commerce. Any Person who is supplying Goods/Services on his account, however would not be considered as E-commerce operator.
- Amazon, Flipkart, Myntra, Shopclues are E-commerce operator because they are facilitating actual suppliers to supply Goods through their platform
- Titan78 supplying watches and jewels through its own website would not be considered as e-commerce operator for the purposes of this Provision.
- Suppose, if we are selling Redmi Note 4 MI Phone through Flipkart then it is E-commerce operator but when we are selling through Its Own Site i.e. MI store then it will not be considered as E-commerce operator.
Registration and Threshold Under E-Commerce Operator
Registration for E-commerce operator
- As Per Section 24(x) of the CGST Act, 2017 benefit of threshold exemption is not available to e-commerce operator and they are liable to be registered irrespective of the value of supply made by them.
- Every E-commerce Operator is required to submit an application in FORM GST REG-07 for Grant of Registration.
- Proper officer may grant registration after verification and issue certificate of Registration in FORM GST REG-06 within 3 working days from the date of submission of application.
- If Proper officer is satisfied on the non-eligibility of E-commerce operator to deducted of tax at source Under Section 51 or collection of Tax Under Section 52 then he may cancel registration and such cancellation shall be communicated to the said person electronically in FORM GST REG-08.
Registration for suppliers supplying Goods or services through E-commerce operator
- As Per Section 24(ix) of the CGST Act, 2017 persons supplying goods or services through e-commerce operator would be liable for registration irrespective of threshold or value of supply made by them.
- Above condition is applicable only when supply is made through such e-commerce operator who is required to collect tax at source (TCS) under section 52 of the CGST Act, 2017.
- However, when E-commerce operator are liable to pay tax on behalf of supplier under a notification issued under section 9(5) of the CGST Act, 2017 in such case supplier of services are entitled for threshold exemption.
TCS (Tax Collection at source) under E-commerce Operator
- The E-commerce Operator is required to collect an amount at the rate of 1% (0.5%CGST+0.5% SGST) of the net value of Taxable supplies (Total Supplies- Return by customers).
- TCS will be collected by E-commerce operator if consideration with respect to supplies is collected by Such Operator from customers and transfer to actual supplier.
Situations where TCS will be/will not be collected by E-commerce operator
If a Person Supplying own products through his own hosting website then as per Sec. 52 of CGST Act, 2017 TCS will not be collected because TCS is required to be collected by E-commerce operator when taxable supply is made through it by other supplier & consideration is collected by E-commerce operator. When someone is selling own product through own website there is no need to collect TCS. Here normal GST rate will be applicable.
If Someone is Purchasing goods from different vendors and are selling such goods on own website under through his own billing then TCS will not be collected because supply is not made by other supplier. Here 2 transactions are in picture- (a) Purchasing through another vendor (b) Selling through own website
In First situation GST will be charged by Vendor and Input will be available to the person receiving such supply.
In the second situation is supply through own and not through other suppliers so no need to collect TCS and Transaction will attract GST at normal rates.
a. When Seller supplies exempted or Zero-Rated Goods through E-commerce Operator then As Per Section 52(1) of CGST Act, 2017 TCS will not be collected because according to such provision TCS will be collected when taxable supply is made through E-commerce operator when supply is not taxable TCS will not be collected.
b. Travel agent providing services through E-commerce Operator will be liable to collect TCS under Section 52 of CGST Acct, 2017.
c. When if there is transaction in which 2 or more E-commerce Operator are involved then in such case each transaction will separately examined as per sec. 52 of the CGST Act, 2107 and TCS will be collected accordingly.
Collection/Remittance/ Input tax credit of TCS
Collection: E-commerce Operator should make collection during the month in which consideration amount is collected from the recipients.
Remittance: The amount collected by E-commerce Operator to be remitted to the Government within 10 days after the end of the month in which amount was so collected.
Input Tax Credit to the Supplier: TCS paid by operator to Government will reflect in GSTR-2 of actual supplier based on GSTR-8 filed by operator
Return and Matching concept in E-commerce Provision
Return: As Per Section 52(4) & Section 52(9) of the CGST Act, 2017, Every E-commerce Operator is required to furnish a statement electronically containing the details of outward supplies of goods or services made by it and includes supplies returned through it and amount collected by it as TCS during a month Within 10 days after the end of such month.
Statement will be filed in form GSTR-8 except this operator is also required to file an annual statement by 31st day of December following the end of the financial year in which the tax was collected.
Matching and Mismatching under E-commerce
Details of supply furnished by Every E-commerce Operator is his statement for the month will be matched with corresponding details of outward supply furnish by concerned supplier in his return. Where the details of outward supplies declared by E-commerce operator do not match with the corresponding details by the supplier discrepancy will shall be communicated to both persons. [Section 52(8) and Section 52(9) of the CGST Act, 2017]
When discrepancy is communicated to supplier or E-commerce operator and the same is not rectified by either Supplier or E-commerce operator same will be added to the output tax liability of the said supplier in his return for the month succeeding the month in which discrepancy is communicated.
Supplier in whose liability amount has been added, shall be liable to pay tax along with the interest on the amount added from the date such tax was due till the date of its payment. [Section 52(10) and section 52(11) of the CGST Act, 2017]