Tax on e-Commerce in GST Era: A special attention is given on E-tailers like Amazon India, Flipkart, eBay etc. in new indirect tax law i.e. GST. In last few years the e-shopping get massive attraction by Indian customers which opens new source of revenue to Government. In GST Law e-commerce is discussed in section 52 of the CGST Act. The relevant statutory provisions related to Electronic Commerce Operator are as under:
Definition:
Section 2 (44) “electronic commerce” means the supply of goods or services or both, including digital products over digital or electronic network;
Section 2 (45) “electronic commerce operator” means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce;
Levy and collection:
Section 9 (5): The Government may, on the recommendations of the Council, by notification, specify categories of services the tax on intra-State supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services:
Provided that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax:
Provided further that where an electronic commerce operator does not have a physical presence in the taxable territory and also he does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax.
Composition Scheme is not available for Electronic Commerce Operator:
Section 10 (2) The registered person shall be eligible to opt under sub-section (1), if: — (d) he is not engaged in making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52; and
Compulsory registration in certain cases:
Section 22 (ix) persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52;
Section 22 (x) every electronic commerce operator;
Collection of Tax at Source (TCS):
Section 52 (1): Notwithstanding anything to the contrary contained in this Act, every electronic commerce operator (hereafter in this section referred to as the “operator”), not being an agent, shall collect an amount calculated at such rate not exceeding one per cent., as may be notified by the Government on the recommendations of the Council, 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.
Explanation.––For the purposes of this sub-section, the expression “net value of taxable supplies” shall mean the aggregate value of taxable supplies of goods or services or both, other than services notified under sub-section (5) of section 9, made during any month by all registered persons through the operator reduced by the aggregate value of taxable supplies returned to the suppliers during the said month.
Important Features of E-Commerce under GST Regime
E-Commerce operator will be liable to pay GST on supply of services provided by them to the suppliers. E-tailers like Amazon etc. will be liable to pay GST on supply of goods and/or services made by them through their web portal. The important point for kept in mind is:
(a) The e-Commerce Operators is not eligible for any threshold limit therefore they are liable to get registered under GST irrespective of turnover limit.
(b) E-Commerce Operator are liable to collect TCS on the supplies of goods and/or services made by the suppliers through its web-portal.
(c) The supplies reported by E-Commerce Operator in their specified returns will be cross verified with the details given by the supplier in his Return for outward supplies (GSTR-1) and in case of any mismatch, tax liability of vendor will be re-determined.
(d) As per CGST Notification No. 17/2017-Central Tax (Rate) dated 28-06-2017 the E-Commerce Operator who provide (i) renting of motor vehicle (Taxi etc.) or (ii) accommodations of Hotels is liable to pay GST under Reverse Charge Mechanism.
