Indian E-commerce is blooming at best and increasing enormously every year. It is anticipated that it would grow 6 to 10 times in a span of next five years. The latest analysis shows the larger disposable incomes and the expediency afforded by online shopping are the two main factors which are creating magic for E-commerce in India. Due to the tremendous increase in the same and looking to the complexity of taxation in the matter, the government has provided special provisions and regulations for e-commerce organizations under GST Law.
E-Commerce has been defined u/s 2(44) of CGST Act, 2017 which means the supply of goods or services or both including digital products over the digital or electronic network.
E-Commerce Operator has been defined u/s 2(45) of CGST Act, 2017 which means any person who directly or indirectly owns, operates or manages the digital or electronic facility or platform fore-commerce.
Registration aspects under GST:
GST Registration for e-commerce operator:
It is mandatory for e-commerce operator (as defined above) to obtain GST registration online irrespective of the value of supply made by them.
GST Registration for the person selling through e-commerce operator:
For the person who undertakes supplies through e-commerce websites, it is mandatory to obtain GST registration irrespective of the value of supply made by them. The application for registration must be applied irrespective the ownership of the websites or portal through which supplies are made.
Services Notified u/s 9(5) of CGST Act, 2017:
In case services notified u/s 9(5), the e-commerce operator is liable to pay tax, on behalf of the suppliers. If such services are supplied through its platform, all the provisions of the Act shall apply to such e-commerce operator as if he is the supplier for this purpose.
Tax Collected at Source (TCS)
Tax Collected at Source is payable by the seller who collects in turn from the lessee or buyer. The goods are as specified under section 206C of the Income Tax Act, 1961. E-commerce operators are also covered under this category to collect the tax at source.
TCS will be collected by e-commerce operator if consideration with respect to supplies is collected by such operator from customers and further transferred to the actual supplier.The e-commerce operator is required to collect tax at source (TCS) at the rate of 1% of the net value of the goods or services supplied.
TCS so collected by the e-commerce operator is required to be remitted to the government within 10 days after the end of the month in which the amount was collected.TCS will be available as a credit while filing the GSTR-2 return. However, the provisions of TDS and TCS are deferred till June, 2018 by the council.
Filing of Returns:
GSTR - 8 is a GST return that must be filed by all e-commerce operators who are registered under GST for the collection of the Tax Collected at Source. GSTR - 8 filing involves the details like amount of tax collected at source from e-commerce sellers and their GSTIN. Under GSTR - 8 details of outward supplies of goods and service made by sellers through the platform and amount of TCS collected is to be reflected. The information provided by e-commerce operators on GSTR - 8is made available to e-commerce sellers on their GSTR - 2 filing. GSTR - 8 is to be filed by E-commerce operator every month within 10 days of the month end.
E-commerce operator is also required to file an annual statement by 31st day December following the end of the financial year in which the tax is collected.
The following details of supplies made through an e-commerce operator, as declared in Form GSTR - 8, shall be matched with the corresponding details declared by the supplier in Form GSTR - 1:
- GSTIN of the supplier
- GSTIN or UIN of the recipient (If the recipient is a registered person)
- Place of supply
- Invoice number of the supplier
- Date of invoice of the supplier
- Taxable value
- Tax amount
Other returns applicable:
It is a monthly return filed for sales or outward supplies. Every business registered under Goods and Services Tax must file GSTR-1.10th day of following month is the due date for filing GSTR - 1 by all entities.
It is a monthly return of purchases or inward supplies. Every registered person must file GSTR - 2except an Input Service Distributor, non-residential taxable person and Person who is required to deduct the TDS or e-commerce operator system. Cut off is 15th day of succeeding month.
It's a monthly GST return that is divided into part A and B. Part A contains the information that is furnished through returns in forms GSTR-1 and GSTR-2, based on other liabilities of previous tax periods. This will be generated electronically. Whereas Part B contains the tax liability, interest, penalty, and refund claimed from cash ledger. Also, it is auto-populated. The tax liability is calculated based on GSTR - 1and after adjustments for Input Tax Credit claimed in GSTR-2.
Every registered person must file GSTR-3 except for the following except an Input Service Distributor, non-residential taxable person and Person who is required to deduct the TDS or e-commerce operator system. The due date for GSTR-3 is 20th day of following month.
Applicability of GST on Goods returned:
Buyers often return goods depending up on the situations such as the goods don't fit properly or the description does not match the product or if they have changed their minds. E-commerce attracts buyers with its easy return & refund policy and the ratio of such returns are also higher. So, an e-commerce operator is required to collect tax only on the net value of taxable supplies i.e. the values of supplies which are returned are adjusted in the aggregate value of taxable supplies.
For this purpose, the 'net value of taxable supplies'; means 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 by all registered persons through such operator reduced by the aggregate value of taxable supplies returned to the suppliers during the said month.
The e-Commerce platforms are required to take mandatory GST Registration and further are required to file the GST returns on monthly basis. The compliance requirements for an e-commerce platform are distinct and stringent due to discrete nature of transactions involved.