Goods and Services Tax – GST – By: – CA.VINOD CHAURASIA – Dated:- 7-9-2017 – Introduction: This article discusses in detail about GST on E-commerce including the following: E Commerce Business Models Understanding on ECO Registration of ECO & applicable forms Specified services u/s 9(5) Tax collected at source Reporting Mismatch Penalty Declaration of warehouse maintained by ECO as additional place of business by multiple supplier- Any problem ???? Place of supply Reporting in GSTR-1 by ECO E Commerce Business Models E-Commerce or Electronics Commerce business models can generally categorized in following categories. Business – to – Business (B2B) Business – to – Consumer (B2C) Consumer – to – Consumer (C2C) Consumer – to – Business (C2B) Business – to – Government (B2G) Government – to – Business (G2B) Government – to – Citizen (G2C) Business – to – Business (B2B) Website following B2B business model sells its product to an intermediate buyer who then sells the product to the fin
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onsumer – to – Business (C2B) In this model, a consumer approaches website showing multiple business organizations for a particular service. Consumer places an estimate of amount he/she wants to spend for a particular service. For example, comparison of interest rates of personal loan/ car loan provided by various banks via website. Business organization who fulfills the consumer's requirement within specified budget approaches the customer and provides its services. Business – to – Government (B2G) B2G model is a variant of B2B model. Such websites are used by government to trade and exchange information with various business organizations. Such websites are accredited by the government and provide a medium to businesses to submit application forms to the government. Government – to – Business (G2B) Government uses B2G model website to approach business organizations. Such websites support auctions, tenders and application submission functionalities. Government – to – Citizen (G2C
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ory Registration for ECO As per sec. 24(x) of the CGST Act, 2017 the benefit of threshold exemption of ₹ 20L or 10L is not available to e-commerce operators and they are liable to be registered irrespective of the value of supply made by them. Compulsory Registration for person supplying through ECO As per Section 24(ix) of the CGST Act, 2017, the threshold exemption is also not available to persons supplying goods or services through e-commerce operator and they would be liable to be registered irrespective of the value of supply made by them where such electronic commerce operator is required to collect tax at source under section 52 of the CGST Act, 2017. Furthermore, as per sec. 10(2)(d), a composition dealer cannot supply goods through an ECO who is required to collect TCS u/s 52. Specified services u/s 9(5) However, a category of service providers as specified through notification u/s 9(5) are exempted from compulsory registration. Examples are: Housekeeping services such a
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Levy and collection Every e-commerce transaction involves below 3 parties: Seller; Buyer; ECO. And it involves below 2 types of transaction: Between Seller & Buyer – Sale of Goods ; Between Seller & ECO – Provision of market place service. GST shall be levied on both transactions: Between seller & buyer = GST on entire value of goods / services supplied (GST shall be paid by the supplier except in case of Sec 9(5) services) Seller & ECO = GST on commission value / other charges earned by ECO for providing market platform to seller. (GST shall be paid by the ECO) 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. 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 o
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d the amount collected by it as TCS during a month. The amount of TCS paid by the ECO to the government will be reflected in the GSTR-2 of the actual registered supplier (on whose account such collection has been made) on the basis of the GSTR-8 filed by the e-commerce operator. This TCS can be used at the time of discharge of tax liability in respect of the supplies made by the actual supplier. The operator is also required to file an annual statement in Form GSTR-9B by 31st day of December following the end of the financial year in which the tax was collected. Q. How to report in taxable outward supplies done through ECO in monthly GSTR-1 ? Taxable outward supplies made to registered persons through ECO is to be reported in point no. 4C of GSTR-1 for every ECO & rate wise showing below details: GSTIN of ECO GSTIN / UIN of every buyer Invoice details Tax rate Taxable value Tax amount Place of supply Taxable outward inter-state supplies made to unregistered persons (where the invoi
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supplier in his monthly or any preceding month GSTR-01. Where the details of outward supplies declared by the ECO in his monthly GSTR-08 do not match with the corresponding details declared by the actual supplier in his monthly GSTR-01, the discrepancy shall be communicated to both persons. The amount in respect of which any discrepancy is communicated and which is not rectified by the supplier in his GSTR-01 or by the ECO in his GSTR-08 for the month in which discrepancy is communicated shall be added to the output liability of the said supplier in his return for the next month succeeding the month in which the discrepancy is communicated. The concerned supplier in whose output tax liability any amount has been added, shall be liable to pay the tax payable in respect of such supply along with interest on the amount so added from the date such tax was due till the date of its payment. Notice to ECO u/s 52(12) Any officer not below the-rank of Deputy Commissioner may issue a notice to
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quirements of maintaining records as per section 35 of the CGS T Act, 2017 and Rules 56 to 58 of the CGST Rules, 2017. Online Travel agents as ECO Online travel agents providing services through digital or electronic platform will fall under the category of ECOs liable to deduct TCS under Section 52 of the CGST Act, 2017. In cases of transaction involving 2 or more e-commerce operators, each transaction needs to be treated separately and examined according to the provisions of Section 52 of the CGST Act, 2017 & TCS will be deducted accordingly. Query -1 Many a times it happens that ECO does not provide invoicing solution to the Seller. In such cases, invoice is generated by the seller and received by the buyer without ECO getting to know about it. The payment flows through the ECO. Ans TCS is to be collected on the net taxable value of such supplies in respect of which the ECO collects the consideration. The amount collected should be duly reported in GSTR-8 and remitted to the Gov
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tax at source as per the provisions of this Section. These transactions will be liable to GST at the prevailing rates. Query- 4: What is the impact of GST on goods returned after Sale ? Ans: An e-commerce company is required to collect tax only on the net value of taxable supplies. In other words, the values of supplies which are returned are adjusted in the aggregate value of taxable supplies. As per explanation to sec. 52(1) : Net value of taxable supplies = Aggregate value of taxable supplies through the operator Less: Supplies returned Less: Supplies under Section 9(5) Place of supply in respect of Goods sold through E-commerce operator under GST Q1. Whether E-commerce operator (ECO) like FILPKART, AMAZON, SNAPDEAL is to be considered as agent or dealer of the manufacture / trader & provisions of section 10(1)(b) of IGST Act, 2017 as applicable to Bill to – Ship to transactions shall apply? Ans. Sec. 2(45) of CGST Act, defines the term electronic commerce operator as any person
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or. From the above, it may construed that the ECO shall not be agent for the purpose GST. ECO is an independent service provider and earning commission for the services rendered by it and its primary responsibility is collect TCS @ 2% on 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. From the above discussion, it is amply clear that the ECO is not working in the capacity of agent or otherwise. It is only providing the online market place services and earning subscription fees or commission on the sale value from the listed sellers. So the provisions of section 10(1)(b) of IGST Act, i.e. bill to – ship to provisions are not applicable to ECO. Q2. In above situation, how to determine place of supply in goods are sold by a manufacture / trader through E-commerce operator (ECO) & how to report these supply in monthly GSTR-1? Ans. In continuation with answer to Q1, the subject
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