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December 29, 2022
By
Pranjal Gupta

Is GST registration mandatory for E-commerce?

E-Commerce operators are mandated to mandatory obtain a GST registration no matter what the value of their supply of goods or services or both made by them. Regardless of the magnitude of the sale, all operators who make supplies through E-commerce websites are required to obtain GST registration. GST has a major impact on ecommerce in India. With more and more commerce happening online, the Government has provided special provisions and regulations that ecommerce companies have to comply with under GST.

E-Commerce

Indian E-commerce is at best thrive and is increasing enormously every year. It is anticipated that it would grow 6 to 10 times in a span of next five years. The latest analysis shows the larger disposable incomes and the expediency afforded by online shopping are the two main factors which are creating magic for E-commerce in India. Due to tremendous increase in the same and looking to the complexity of taxation in the matter, government has provided special provisions and regulations for ecommerce companies under GST.

GST Registration for E-Commerce

It is mandatory for E-commerce operator to obtain GST registration irrespective of the value of supply made by them.

GST Registration for the person selling through E-commerce operator:

All the members who undertake supplies through E-commerce websites, should mandatorily obtain GST registration irrespective of the value of supply made by them. The entity should apply for the GST registration irrespective the ownership of the websites and goods supplied.

1. Services Notified u/s 9(5) of CGST Act, 2017: In case services notified u/s 9(5), the E-commerce operator is liable to pay tax, on behalf of the suppliers. If such services are supplied through its platform, all the provisions of the Act shall apply to such E-commerce operator as if he is the supplier for this purpose

Tax Collected at Source (TCS)

The Tax collected at source (TCS) acts as a mechanism, wherein, the E-commerce operator collects part of the tax operator when the supplier supplies the required goods or service through its portal.

1. TCS deducts at the rate of 1% on the net value of the goods or services supplied through the e-commerce operator i.e. an e-commerce operator should deduct tax @1% of the net value of taxable supplies.

2. The E-commerce operator shall collect the TCS with respect to supplies collected by such operator from customers and transferred to actual supplier.

3. The E-commerce operator should remit to government before 10 days after the end of the month from the date of the invoice created.

4. TCS will be available as credit while filing GSTR-2 return.

Place of Supply for E-Commerce

GST is destination based tax. Goods / services will be taxed at the place where they are consumed meaning thereby place from where goods / services are sold is not at all relevant, however, the place, where goods / services are consumed, would be treated as place of supply under GST.

GST Return Filing for E-Commerce

1. GSTR – 8 return is to be filed by E-commerce operator every month within 10 days after the end of such month. Under GSTR-8 return details of outward supplies of goods and service made by sellers through the platform and amount of TCS collected is to be reflected.

2. E-commerce operator is also required to file an annual statement by 31st day December following the end of the financial year in which the tax collected.

3. Certain documents are required for GST registration

4. The amount of TCS paid by the e-commerce operator to the government will be reflected in the GSTR-2 of the actual registered supplier on the basis of the statement filed by the E-commerce operator.

5. The following details of supplies made through an E-commerce operator, as declared in FORM GSTR-8, shall be matched with the corresponding details declared by the supplier in FORM GSTR-1:—

a. GSTIN of the supplier;

b. GSTIN or UIN of the recipient, if the recipient is a registered person;

c. State of place of supply;

d. GST Invoice number of the supplier;

e. Date of invoice of the supplier;

f. Taxable value; and

g. Tax amount

GSTR 1 Return

It is a monthly return filed for sales or outward supplies. Every business registered under Goods and Services Tax must file GSTR1. 10th day of following month is the due date for filing GSTR – 1 by all entities.

GSTR 2 Return

It is a monthly return of purchases or inward supplies. Every registered person must file GSTR 2 return except an Input Service Distributor, non-residential taxable person and Person who is required to deduct the TDS or e-commerce operator system. Cut off is 15th day of succeeding month.

GSTR 3 Return

It’s a monthly GST return that is divided into part A and B. Part A contains the information that is furnished through returns in forms GSTR-1 and GSTR-2, based on other liabilities of previous tax periods. This will be generated electronically. Whereas Part B contains the tax liability, interest, penalty, and refund claimed from cash ledger. Also, it is auto-populated. The tax liability is

calculated based on GSTR – 1 and after adjustments for Input Tax Credit claimed in GSTR-2.

Every registered person must file GSTR-3 return. Except for the following an Input Service Distributor, non-residential taxable person $ person who is required to deduct the TDS . The due date for GSTR-3 is 20th day of following month.

Know more about GST Return Filing.

GST on Good Returned by Buyers

The e-commerce operator should collect tax only on the net value of the taxable supplies. The “net value of taxable supplies” means the aggregate value of taxable supplies of goods, services or both other than the services on which entire tax payable by the e-commerce operator, made during any month by all registered persons through such operator reduced by the aggregate value of taxable supplies returned to the suppliers during the said month.

GST E-Commerce FAQs

Should E-commerce operators do GST registration?

Yes, registration under GST is mandatory for all e-commerce operators irrespective of the sales turnover. Hence, prior to commencing business as an ecommerce operator or within 30 days of commencing business, all ecommerce operators are required to be registered under GST.

Should the sellers acquire GST registration for using e-commerce platforms?

Yes, persons undertaking a supply through e-commerce operators are also required to obtain GST registration irrespective of sales turnover. Hence, any person who intends to sell on Flipkart or Amazon or Snapdeal must obtain GST registration.

Documents Required for e-Commerce GST Registration

The documents required for GST registration varies according to the kind of business or GST Registration desired. Proprietors, partnerships, and corporations, for example, must provide several different categories of documentation for registration.

Even if an e-commerce supplier’s turnover is less than the prescribed threshold limit, all traders selling goods online must register for GST. In order to claim the tax collected by the aggregators.

Additionally, to know more about the specific documentation required for GST registration go to there official website

Suggestions:

Check out details about GST, Income Tax Guide, GST Registration Process

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