E-commerce is fast gaining traction in today’s world. In simple terms, e-commerce can be described as the conduct of any commercial activity using the Internet as a medium.
As we all are aware GST is going to be implemented at any moment of time when government think fit. Under existing laws, e-commerce operators have lot of confusion and compliance points.
After implementation of GST, most of the compliance point, like, VAT, service tax, entry tax, local taxes etc are being combined. However, some new procedure shall be introduced like TCS by e-commerce operators.
In this Article, we have tried to address the compliance points under GST regime comparing with existing laws.
For ease of understanding, we can categorized the E-commerce operators as under:-
- E-commerce Aggregators – Websites who are providing their platform to suppliers to sell the products/services, like flipkart, snapdeal etc
- E-commerce suppliers – wesbsites who sell their own product via their own platform like hp through https://www.hpshopping.in/
- E-commerce service providers – websites who sell their service through their own platform like centrik.in , www.linkedin.in etc
Lets discuss and understand the GST compliance for E-commerce Aggregator. (Rest two categories would be discussed next updates)
GST for E-commerce Aggregators
Mode of operandi – The E-commerce aggregators, generally, charge commission from the product or service owners to display and sell.
E- commerce aggregator shall compulsorily be required to registered in every Such State from where he makes a taxable supply of goods/services irrespective of their turnover i.e. threshold limit shall not be applicable to them.
2. Tax Rates
It would depend on the type of service or product in which such aggregator is dealing with. Currently, E-commerce operator are liable to pay service tax @ 15%on facilitation services provided to Seller of goods/ Services.
As per my opinion, since inter-State sale would include both CGST and SGST, the rate would be between 18% to 28%. Till date GST Council has decided four slabs of GST rates, 5%, 12%, 18% and 28%.
3. Input Tax Credit
Presently, E-commerce aggregators are eligible to take input tax credit on service tax paid on specified input Services. This scenario would change to a large extent under GST regime. E-commerce aggregators can avail credit of IGST, CGST and SGST paid on Input Services in the manner prescribed. However, credit of CGST shall not be available against SGST and vise-Versa.
As per my opinion, due to available of input tax credit, the price of facilitation service may decrease.
Every E-commerce aggregator has to file monthly return to furnish details of supplied made through it in GSTR-8 within 10 days of next month.
Among others, the following details are required to be furnished-
- Details of supplies to registered taxable person made through e-commerce operator.
- Details of supplies to un-registered taxable person made through e-commerce operator
- Tax collected at source details.
- Details of liability payable and actual payment.
5. Payment of Taxes
In GST regime, the e-commerce aggregator need to make monthy payment on or before prescribed due date (has not been notified yet). Apart from that, E-commerce aggregator need to deduct and deposit TCS as described under.
6. Concept of TCS for E-Commerce Aggregators
GST regime would come up with new concept of collection of TCS @1% of the value of goods sold through it. As per the provision every electronic commerce aggregator and shall be paid to the government within 10 days after the end of the month in which such collection is made.
E-commerce aggregators may bear the burden of paying higher rate of tax on inter-State supply of services. More returns per State and TCS compliance would add compliance burden to them.
Views are personal and for any clarification, please contact Amarpal@centrik.in