GST ON E-COMMERCE OPERATORS
This article gives you a clear understanding of the GST registration requirement, GST Liability and provisions for Tax Collected at Source.
Under section 44(2) E-commerce means the “supply of goods or services” or both including digital products over the electronic network.
Every e-commerce transaction involves three parties and two types of transactions:
3. E-Commerce Operator (ECO)
Types of transaction:
1. Between Seller & Buyer – Sale of Goods ;
2. Between Seller & ECO – Provision of the market place
GST shall be levied on both transactions:
Between seller & buyer: GST on the entire value of goods/ services supplied (GST shall be paid by the supplier except in case of services specified u/s9(5))
Seller & ECO: GST on commission value/ other charges earned by ECO for providing a market platform to the seller. (GST shall be paid by the ECO)
Service under section 9(5) are:
E-commerce portals are required to be compulsorily registered under Section 24(ix) of the CGST Act and shall be paying GST on commission on the amount received, without availing any exemption threshold limit. The tax shall be charged in the invoices raised against the supplier of goods or services, such suppliers can avail ITC on GST charged (if eligible).
Tax Collected at Source:
Provision of Tax Collected at Source (TCS) has been introduced w.e.f. 1-10-2018.Every e-commerce operator, not being an agent, should collect TCS at such rate not exceeding 1% (1% CGST + 1% SGST), of the net value of taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the operator. The rate for TCS is 1% for IGST for an inter-state taxable supply.
Non Applicability of TCS Provisions :
TCS provisions are not applicable where GST is payable under reverse charge. TCS provisions also do not apply in case of exempt supply.
There is no TCS if you are selling your own products through an electronic portal
|Description of Supply||Threshold Limit exemption applicability||Registration||Person liable to pay GST|
|Supply of Goods||NO||YES||Supplier of Goods-Forward Charge Mechanism Applicable|
|Supply of Services||Yes||Yes (only when turnover exceeds Rs.20 Lakhs)||Supplier of Services-Forward Charge Mechanism Applicable|
|Supply of Passenger Transportation Services||Not required||Not required||E-Commerce Operator-Reverse Charge Mechanism Applicable|
|Supply of House Keeping Services||YES||Yes (only when turnover exceeds Rs.20 Lakhs)||E-commerce Operator- Reverse Charge Mechanism Applicable. Once Supplier is liable to get registered, Supplier shall be liable to pay GST|
|Supply of Accommodation Services||YES||Yes (only when turnover exceeds Rs.20 Lakhs)||E-commerce Operator- Reverse Charge Mechanism Applicable. Once Supplier is liable to get registered, Supplier shall be liable to pay GST|
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