“When a small craftsman in a village in India brings a smile to a customer looking at his phone on a metro ride in New York, we know we are creating something that has fundamentally changed our lives. I see technology as a means to empower and as a tool that bridges the distance between hope and opportunity. Social media is reducing social barriers. It connects people on the strength of human values, not identities.” It has been approximately two years since Narendra Modi’s speech about Digital India. In this speech NaMo has captured the essence of E-Commerce. The E-Commerce Industry has grown with leaps and bounds in the last 18 years with advancement in technology as well as internet.
This growth in the E-Commerce Industry has led to the concept of online marketplaces. An online marketplace is much like the market places our mothers would drag our fathers to. Except that these market places are on the internet and intangible.
Lakhs of sellers are present on these e-commerce websites conducting millions of transactions every other second. GST implementation affects every party included in the trade of E-Commerce – right from the seller to the E-Commerce Operators.
Here is the impact of GST on E-Commerce Industry:
The GST law’s provisions state that the businesses involved in E-Commerce activities have to get registered in every state they are supplying to – irrespective of their turnover. Since the nature of the E-Commerce business is such that the seller expects orders from every state, the operators have to register in EVERY STATE.
You can complete your GST Registration online with expert assistance within 24 hours.
If, for some reason, an E-commerce operator does not have an office in a particular state, his representative will be liable to pay the tax on behalf of the operator. In case the operator doesn’t have an establishment as well as a representative, the E-Commerce Operator should appoint a person for the purpose of paying its taxes.
As per this notification dated 15th November 2017, e-commerce sellers need not register if total sales is less than Rs. 20 lakhs.
Don’t worry; the ecstatic shouts of satisfied customers will soon drown your sighs.
Tax Collection at Source:
Every e-commerce operator should collect tax @ 2% on the net value of taxable supplies made through their platform, where the consideration is collected by the operator. Here, the net value of taxable supplies will be equal to the value of taxable supplies made by all registered taxable persons minus the value of taxable supplies returned to the suppliers.
It is also the responsibility of the E-Commerce platform to file the monthly and annual returns. As a result, this increases the burden on accounting.
- E-Commerce Tax:
E-Commerce Tax is the tax on goods bought into the state by E-Commerce marketplaces. This tax has been shown the door because of the nature of GST (it is a destination based tax, after all). So, this implies that the government of the state in which the delivery is being made is the beneficial party. Now I’m sure none of the state governments would oppose to that, would they?
- Composition Scheme:
The motive behind the Composition scheme is to reduce compliance related burdens for small and medium businesses. Although they don’t get to claim input credit, compounding dealers have to pay taxes at a lower rate. The Government of India has explicitly denied entry to E-Commerce businesses under this scheme, no matter how teeny tiny their business.
- E-Commerce Operator:
- GSTR-1: Sales ReturnDue Date: 10th of next month
- GSTR-1A: Supplier will get details of outward supplies as added, corrected or deleted by the recipient in Form GSTR-2 on the 17th of next month.
- Due Date: 11th of a month
- GSTR-2: Purchase Return
- Due date: 15th of next month
- GST ITC-1:
- Due Date: 21st of a month.
For more information regarding the details that taxpayers
have to include during the Return Filing process, read GST Return Filing.