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As per subsection 4 of Section 3 of Draft GST Act the Supply of any branded services by an aggregator under a brand name or trade name owned by him shall be deemed to be his own supplies and shall be required to file the outward supplies such supplies. Eg: Ola providing services under its own brand name. 

On the other hand if such Aggregator does the supply of any branded services with the help of their e-platform under a brand name or trade name of the suppliers of goods and/or services, then every electronic commerce operator shall, at the time of credit of any amount to the account of the supplier of goods and/or services or at the time of payment of any amount in cash or by any other mode, whichever is earlier, collect an amount, out of the amount payable or paid to the supplier, representing consideration towards the supply of goods and /or services made through it. Eg: WS Retail selling their goods using Flipkart Ecommerce portal. Now Flipkart has to collect tax at source while paying the amount to WS retail which Flipkart received from the consumers of WS Retail products.

So there is an additional requirement on the Aggregators for the Collection of Tax at source and reporting thereof by filing a prescribed return with respect to the consideration they pay to the suppliers who supply goods and/or services through their E-commerce portals. The details of Outward supplies done by the suppliers of goods and/or services through e-commerce shall also be reported their Outward supplies return.

The amount so collected at source shall be claimed as credit by their supplier at the time of discharging of their GST liability.

From the above requirements of law it can be envisaged that now the e-commerce providers have a provision to file 2 returns:

1. Return of outward Supplies the supply of goods and/or services under their own brand name. This Return is to be filed on or before 10th of the succeeding month.

2. Return for Tax collected at source with respect to the Suppliers who supply goods and/or services via there portal. This Return is also required to be filed on or before 10th of the succeeding month.

Important Note for Suppliers who supply goods and/or services through ecommerce portals:

The Suppliers can’t hide their liability supplies they do through the E-commerce portal

The Outward supplies return of the Suppliers shall be matched with the Supplies as reported by the E-commerce portals in their Return of tax collection at source.  In case there is any discrepancy the same shall be added to the Output tax liability of the supplier and they shall be required to discharge such additional tax liability arising due to such short reporting of Outward supplies in their Return of outward supplies.

Extracts of Act for reference: Refer Section 3, Section 43B and Section 43C of the draft law for complete clarity of concept.

Author is a Qualified Chartered Accountant and Company Secretary having 5 years of industry experience.


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