GST Provisions with Respect to E-Commerce

By Registrationwala

29th April 2017

 

In this article, we would be emphasizing on the GST provisions in terms with e-commerce. The notion of e-commerce changed the business industry in India. Talking about the present scenario, electronic commerce or e-commerce industry attracts multiple taxes. Every State has its own sets of rules and regulations to impose charges on the e-commerce industry.

Electronic Commerce or e-commerce has transformed the way how business is done in India. Currently, the e-commerce industry in India is faced with the levy of multiple taxes. Every state has imposed its own set of rules and taxes on the e-commerce industry. The absence of clearness on the tax treatment of the different sorts of web based or e-commerce business exchanges, and new perspectives, for example, e-wallet and cash backs has brought about a hectic and confused duty condition for the business.

With the advent and implementation of GST, e-commerce firms are looking forward to a clearer and modest set of rules of tax imposition with the removal of various state specific rules and levies. The GST regime acknowledges the need for specified rules for the e-commerce industry.

The following stanzas would outline specific provisions in terms with e-commerce in GST.


A detailed specification has been dealt below on the requirements from e-commerce operators and suppliers on e-commerce platforms under GST.

E-Commerce Operator

A person operating, managing digital or electronic facility or platform for electronic commerce is referred as an e-commerce operator.

The pre-requisites from an e-commerce operator under the GST regime are-

Mandatory registration

It is mandatory for all e-commerce operators to register under GST, irrespective of what their turnover is.

Tax to be paid by e-commerce operator on notified services

Certain service categories may be notified, on the supply of which, the tax shall be paid by the e-commerce operator and not the supplier.

In the given case,

  • If the e-commerce operator has no establishment in a State, the person liable for tax will be any person representing the e-commerce operator for any person in that State.
  • In the case where the e-commerce operator does not hold an establishment and also has no representative in the State, the e-commerce operator will be required to appoint a person in the State for the purpose of paying tax, who will be liable to pay the tax.

E-commerce operator has to collect tax at source

Every e-commerce operator has to collect tax @ 2% on the net value of taxable supplies manufactured through their platform, where the consideration, with respect to such supplies, has to be collected by the operator.


To illustrate, Ibex Deals is an e-commerce operator. Robust Pvt. Ltd. and Global Pvt. Ltd are suppliers of Ibex Deals.

The following supplies are made on Ibex Deals in October ‘17.

Here, the net taxable supplies of Ibex Deals isRs 2, 70, 00,000 and GST collected is Rs 5,40,000.

Returns and tax payment process

  • On 10th of a month, e-commerce operator, needs to outfit Form GSTR-8 containing points of interest of outward supplies made through the stage in the earlier month, including supplies returned. In Form GSTR-8, the invoice-wise details of enlisted assessable people and total estimation of provisions to unregistered people must be given. Apart from this, the e-commerce operator also needs to pay the tax collected from the supplier.

Illustration,

On 10th of November 2017: Ibex Deals furnishes Form GSTR-8 showing net taxable supplies manufactured through the platform of Rs. 2, 70, 00,000. They also pay Rs. 5,40,0000 as tax collected from suppliers.

  • On 21st of a month, any disparity between provisions announced by the online business administrator or the e-commerce operator and providers on the stage is made accessible in Form GST ITC-1. The error must be corrected in the arrival for the month in which it is conveyed.

In the above-enumerated example, Ibex furnishes Form GSTR-8 for October’s supplies on 10th November ’17. If a discrepancy is reported in Form GST ITC-1 on 21st November ‘17, it must be rectified in the return for November ’17, to be filed on 10th December ’17.

Suppliers on e-commerce platforms:

People supplying goods or services on e-commerce platform are known as Suppliers on e-commerce platforms. The pre-requisites from suppliers on e-commerce platforms are-

Mandatory registration

Registration of all the suppliers on e- commerce platforms is mandatory under GST. Hence, even if the aggregate turnover of an e-commerce supplier does not exceed the threshold limit, he will have to register himself.

Non-eligibility for Composition Scheme

A person supplying goods or services through an e-commerce operator will not be eligible for registration under the composition Scheme. Henceforth,even if the person’s aggregate turnover does not reach the threshold of Rs. 50 Lakhs, he/she cannot avail the option to become a composition tax payer.

Return process

A supplier on an e-commerce platform or portal has to follow the GST return process applicable on a regular dealer.

In annexation to this, following are the below-enumerated details need to be provided with respect to supplies through e-commerce platforms –

  • On 10th of a month,a supplier needs to outfit Form GSTR-1 containing subtle elements of outward supplies made through internet business stages. In Form GSTR-1, invoice-wise details of supplies of to enlisted assessable people and total estimation of provisions to unregistered people made through the internet business stage must be given.

To illustrate,

10th November, 2017: Robust Pvt.Ltd and Global Pvt.Ltd. furnish Form GSTR-1 showing net taxable supplies made through Ibex Deals.

  • On 11th of a month, Form GSTR-2A will be made accessible to the provider. The total measure of duty gathered by e-commerce operator in the earlier month will be auto-populated, in light of Form GSTR-8 documented by the web-based business administrator or the e-commerce operator.

To illustrate,

On 11th Nov, 2017 Form GSTR-2A is made available to Robust Pvt.Ltd and Global Pvt.Ltd. In this case, the aggregate amount of tax collected by Ibex Deals will be auto populated based on GSTR Form-8 filed by Ibex Deals.

  • On 15th of a month, a supplier needs to outfit Form GSTR-2, in which the subtle elements of duty gathered by the e-commerce operator can be acknowledged or changed. The tax collected will be credited to the supplier’s electronic cash ledger on provisional basis, which can be set-off against the tax liability.
  • On 21st of a month,Form GST ITC-1 is made accessible to a supplier. Any inconsistency in provisions outfitted with provisions announced by the e-commerce operator will be appeared. The disparity must be corrected in the arrival for the month in which it is imparted. If not amended and the estimation of provisions outfitted by the administrator is more than the esteem outfitted by the supplier, the differential sum with interest will be added to the expense risk of the provider for the succeeding month.

In the above illustration, Robsut Pvt. Ltd furnishes Form GSTR-1 for October’s supplies on 10th November ’17. If a discrepancy is reported in Form GST ITC-1 on 21st November ‘17, it must be rectified in the return for November ’17, to be filed on 10th December ’17.

 

GST Provisions with Respect to E-Commerce

2017-04-29