19 November 2013
Dear All, I have a query..One of my client has started his online shopping website and i m not sure whether he requires service tax registration. Please help me out in this whether he requires service tax registration and if yes then under which category and at what point service tax is applicable in this case.
24 July 2025
Your question relates to whether service tax registration is required for a client running an online shopping website as of November 2013, under the Service Tax law in force at that time (pre-GST era).
✅ Key Factors to Consider: To determine whether Service Tax applies and registration is required, we must assess:
1. Nature of Services Provided: An online shopping website (e-commerce) may be:
Selling own goods (like a trader or retailer), or
Providing a platform to other sellers/vendors, or
Providing additional services like warehousing, advertising, logistics support, commission, etc.
📌 Scenarios: Scenario A – Selling Own Products Only: If your client is only selling own goods, then:
This is a trading activity, which is not a taxable service under the Service Tax law. ✅ No service tax registration is required.
Scenario B – Marketplace Model (like Amazon, Flipkart): If your client allows third-party sellers to use the platform and charges them:
Commission or listing fees,
Advertisement charges, or
Logistics, packaging, or warehousing charges,
Then these are taxable services under the following categories:
Business Auxiliary Service (BAS) (till June 2012)
Online Information and Database Access or Retrieval Services (OIDAR)
Support services to business or commerce (under post-2012 Negative List regime)
✅ Service tax registration is required if the total value of taxable services exceeds ₹10 lakhs per annum (as per Notification 33/2012-ST).
Scenario C – Acting as Intermediary or Agent: If the website is only facilitating sales and earning commission from sellers:
That is considered intermediary service, which is taxable.
Service tax applies on commission income.
✅ Registration mandatory if commission income exceeds ₹10 lakhs/year.
📎 Service Tax Registration Category: Service Provider
Nature of Service: Choose "Business Auxiliary Services" or “Online database access or retrieval services” (depending on the exact structure)
🧾 When is Service Tax Payable? As per Point of Taxation Rules, 2011
Typically, tax becomes payable on raising invoice or receipt of payment, whichever is earlier.
✅ Summary: Nature of Business Service Tax Applicable? Registration Needed? Selling own goods only ❌ No ❌ No Charging commission/fee to vendors ✅ Yes ✅ Yes, if > ₹10 lakh/year Providing logistics, ad, warehousing, etc. ✅ Yes ✅ Yes, if > ₹10 lakh/year
CAclubindia
