Taxation consultancy (Direct & Indirect Tax) with regards to eCommerce operators.

Hello ,

Greetings Of The Day

We are eCommerce operators for Services and we connect buyer and seller like amazon , flipkart does and Only difference is they are e-commerce operators for goods and We are e-commerce operators for Services (All Types Of Services Except Services Mention Under section 9 (5) of CGST Act.)

Here Are is the flow of orders

1) Indian seller to Indian buyer
2) Indian seller to non-resident (international) buyer
3) non-resident (international) seller to non-resident (international) buyer
4) non-resident (international) seller to Indian buyer.

Please Note That We Are Referring non-resident seller as an international seller who is on board on our platform and who does not visit India or any other country for fulfilling orders and non-resident seller is paying taxes with respect to its citizenship of its country(USA / Canada / ETC)

Please Find Below Examples With Reference To Flow Of Orders

1.Mr Ravi (Indian Seller) Fulling Order Of Logo Design For Rajesh (Indian Buyer)

*Ravi Annual Turnover Is Less Than 10 Lakh Per Financial Year And Ravi Don't Sell Services Mention Under section 9 (5) of CGST Act.

2.Mr Vivek (Indian Seller) Fulling Order Of Web Development For John Smith(Intentional Buyer)

*Vivek Annual Turnover Is Less Than 10 Lakh Per Financial Year
*Vivek Don't Sell Services Mention Under section 9 (5) of CGST Act.
*It Is Export Of Services For Ravi

3.Mr Trump (Intentional Seller) Fulling Order Of Logo Design For Akash (Indian Buyer)

*Trump Does Not Visit India For Fulfilling Order
*Trump Is Not Resident Of India
*For Trump Above Order Is Classified As Export In Its Origin Country USA
*For Akash Above Order Is Classified As Import In Its Origin Country India

4.Mr Jacob (Intentional Seller) Fulling Order Of Web Development For Christopher(Intentional Buyer)

*Jacob Origin Country Is Germany And Christopher Origin Country Is Canada
*For Jacob Above Order Is Classified As Export In Its Origin Country Germany
*For Christopher Above Order Is Classified As Import In It's Origin Country Canada
*Jacob Is Not Resident Of India And Christopher Is Also Not Resident Of India

In above cases, payment will be received by us from the buyer and thereafter withholding it's commission, we will remit balance to the respective seller..

So we are looking for a taxation consultancy (Direct & Indirect Tax) with regards to Our business that falls under the nature of eCommerce operators.

Hi Hitesh,

Thanks for the detailed explanation of your eCommerce services model. I can help outline the key direct and indirect tax implications for your platform operating as an eCommerce operator for services, considering all four scenarios you mentioned.

1. GST (Indirect Tax) Considerations for eCommerce Operator of Services

a) Applicability of GST on Your Platform (eCommerce Operator)

Under Section 2(45) of CGST Act, an eCommerce operator (ECO) facilitating supply of goods or services through its platform is liable to collect and pay GST on commission or facilitation charges.
You must register as an ECO under GST, collect GST on your commission from the sellers, and remit it to the government.
Your platform is liable to comply with Section 52 of CGST Act regarding TCS (Tax Collected at Source) on supplies made through your platform.

b) TCS (Tax Collected at Source) under GST

As per Section 52, ECO must collect TCS @ 1% on the net value of taxable supplies made through the platform by sellers to buyers located in India.
This is applicable only for supplies made to Indian buyers.
The TCS amount must be deposited with GST authorities and reflected in returns (GSTR-8).

2. GST Treatment of Each Transaction Flow

Scenario	GST Implication on Seller	GST Implication on Buyer	GST Implication on ECO (Your Platform)
1) Indian Seller → Indian Buyer	If turnover > ₹20L (₹10L for NE states), GST applicable on service supply	Input tax credit if registered	GST on commission & TCS @ 1% on seller's supplies
2) Indian Seller → Non-resident Buyer (Export of Services)	Export of services (zero-rated supply) if conditions met (payment receipt in convertible currency, etc.)	Not applicable	GST on commission (out of scope of TCS as buyer is non-resident)
3) Non-resident Seller → Non-resident Buyer	No Indian GST, supply outside India	No Indian GST	GST on commission from seller (if services rendered in India or platform is Indian)
4) Non-resident Seller → Indian Buyer (Import of Services)	Seller liable to pay GST as import of services (reverse charge applies on Indian buyer)	Reverse charge on import of services	GST on commission from non-resident seller

3. TCS and Compliance for Non-Resident Sellers

Non-resident sellers are required to register for GST in India if their services are consumed in India (cases 3 & 4).
Your platform (ECO) is liable to collect TCS on supplies made to Indian buyers, including from non-resident sellers.
However, if sellers are below threshold or services are exempt/zero-rated, TCS may not be applicable.

4. Income Tax (Direct Tax) Implications

Your platform income (commission) is taxable as business income in India.
You must deduct TDS (Tax Deducted at Source) on payments to sellers (resident or non-resident) as per Income Tax provisions, depending on nature of service and DTAA (Double Tax Avoidance Agreement) benefits.
For payments to non-resident sellers, TDS under Section 195 applies on royalty/fees for technical services if applicable.
Sellers (resident and non-resident) are liable to pay tax on income arising in India.

5. Key Compliance Points & Recommendations

GST Registration: ECO must be registered for GST in India.
TCS Filing: File GSTR-8 monthly to report TCS collected.
TDS on Payments: Deduct TDS on commissions paid to sellers as per Income Tax Act.
Maintain Records: Maintain clear records of transactions, including buyer-seller details, transaction value, commissions, and tax deductions.
Foreign Seller Compliance: Assist international sellers in understanding Indian tax laws, GST registration requirements, and TDS applicability.

Summary Table for Your Reference

Aspect	Indian Seller	Non-resident Seller	Buyer (Indian)	Buyer (Non-resident)	ECO Responsibilities
GST on service supplied	Applicable if turnover exceeds threshold	Generally no Indian GST but may require registration for import of services	Eligible for ITC if registered	No Indian GST	GST on commission, TCS on taxable supplies
Income Tax on commission	Taxed as business income	Taxed in India if income arises here	N/A	N/A	Tax on commission income
TCS under GST	Collect 1% TCS on supplies to Indian buyers	TCS applicable on supplies to Indian buyers	N/A	N/A	Collect and deposit TCS
TDS on commission payments	Deduct TDS as per income tax	Deduct TDS under Sec 195 on payments	N/A	N/A	Deduct and remit TDS