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I. Meaning of Electronic Commerce Operator (ECO) and Electronic Commerce

Electronic commerce operator and Electronic commerce has been defined in section 2(45) and 2(44) of GST Act respectively. The statutory provision is given below:

Definition given in Section 2(45) and 2(44) is reproduced below:

(45) 'Electronic commerce operator' means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce;

(44) 'Electronic commerce' means the supply of goods or services or both, including digital products over digital or electronic network;

II. Collection of TCS at source

As per section 52(1) every electronic commerce operator shall collect an amount calculated at the rate of 2% (CGST+SGST/UT-GST) or 2% IGST of the net value of taxable supplies made through it by the suppliers where consideration for such supplies will be by the supplier. Thus, the electronic commerce operator is required to collect the amount of tax out of the amount payable or paid to the supplier.

'Net value of taxable supplies' shall mean the aggregate value of taxable supplies of goods or services or both, other than services notified under sub-section (5) of section 9, made during any month by all registered persons through the operator reduced by the aggregate value of taxable supplies returned to the suppliers during the said month.

III. Reverse Charge in Case of Electronic Commerce Operator

The sub-section 9(5) of GST Act excluding IGST and 5(5) of IGST Act provides the Central or State Government on recommendation of GST Council, by notification, specify categories of supply of goods or services on which the tax will be payable on reverse charge basis by the recipient. The sub-section further provides that all the provisions of this Act shall apply as if the recipient of goods or services is a person liable for paying the tax in relation to supply of such goods and/or services.

IV. Procedural Part

  1. Furnishing monthly statement by ECO in GSTR-8 by 10th of month from the end of the month in which tax is collected at source.
  2. Furnishing Annual Return by ECO.
  3. Correction or omission in the statement furnished to be shown in the statement to be furnish for the month in which such correction or omission are noticed  .
  4. Credit of tax collected at source will be auto populated in GSTR 2 of  the supplier only when such details are furnished by ECO in GSTR-8.

For detailed explanation please see the video as mentioned below

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Category GST, Other Articles by - CA Somil Bhansali  



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