Electronic Commerce under GST of India

By | October 24, 2016

Electronic Commerce under GST of India

gst ecommerce

Electronic Commerce Operator

The first and foremost thing that needs to be understood is, who the target of this tax net is. The purpose fulfills with the definition of ‘Electronic Commerce Operator’ as envisaged in the Model GST Law itself. The prescribed definition of E – Commerce Operator is an inclusive one and has been defined to include:

– every person who, directly or indirectly, owns, operates or manages an electronic platform that is engaged in facilitating the supply of any goods and/or services or in providing any information or any other services incidental to or in connection there with, but

– does not include persons engaged in supply of such goods and/or services on their own behalf.

The scope of coverage of the aforesaid definition seems to be quite wide and seeks to bring into the tax net all player of the generally recognized, Online Market!

Some other terms as defined in the Model GST Law that need to be marked for reference are as under:

Aggregator

An aggregator means a person, who owns and manages an electronic platform, and by means of the application and a communication device, enables a potential customer to connect with the persons providing service of a particular kind under the brand name or trade name of the said aggregator.

Brand name or Trade name

It refers to a brand name or a trade name, whether registered or not, that is to say, a name or a mark, such as an invented word or writing, or a symbol, monogram, logo, label, signature, which is used for the purpose of indicating, or so as to indicate a connection, in the course of trade, between a service and some other person using the name or mark with or without any indication of the identity of that person.

Branded Services

Branded Services mean services which are supplied by an electronic commerce operator under its own brand name or trade name, whether registered or not.

Electronic Commerce

Electronic Commerce means the supply or receipt of goods and / or services, or transmitting of funds or data, over an electronic network, primarily the internet, by using any of the applications that rely on the internet, like but not limited to e-mail, instant messaging, shopping carts, Web services, Universal Description, Discovery and Integration (UDDI), File Transfer Protocol (FTP), and Electronic Data Interchange (EDI), whether or not the payment is conducted online and whether or not the ultimate delivery of the goods and/or services is done by the operator.

Registration

Registration is the identification of a taxable person before the tax administrators. Under the GST Regime, the primary registration obligation is attracted once the volume of supplies made by a person exceeds the prescribed threshold limit, barring the exceptions. E-Commerce segment is a prominent exception to this threshold limit relaxation. It has been prescribed that the following categories of persons shall be liable to get registered under the GST Regime, irrespective of the volume of supplies made by them, namely:

– persons who supply goods and/or services, other than branded services, through
electronic commerce operator; or

– every electronic commerce operator; or

– an aggregator who supplies services under his brand name or his trade name.

Collection of tax at source

The E-Commerce market is huge, growing and most importantly, intangible in practical terms. In order to put a track of transactions in the segment, the provision for tax deduction at source has been inculcated in the e-commerce taxing policy. The provision has been prescribed to be applicable beyond anything to the contrary contained in the Act itself or in any:

– contract,

– arrangement or

– memorandum of understanding.

It has been prescribed that,every electronic commerce operator shall;

– at the time of credit of any amount to the account of the supplier of goods and/or services or

– at the time of payment of any amount in cash or by any other mode

whichever is earlier, collect an amount, out of the amount payable or paid to the supplier, representing consideration towards the supply of goods and /or services made through it, calculated at a rate to be notified in this behalf by the Central/State Government on the recommendation of the Council.

Deposit the Tax

The amount so deducted and collected by the E-Commerce Operator shall have be paid to the credit of the appropriate Government by the operator within ten days after the end of the month in which such collection is made.

Furnish Return

Every operator shall, furnish a statement, electronically, of all amounts collected towards outward supplies of goods and/or services effected through it, during a calendar month, in Form GSTR-7, within ten days after the end of such calendar month.

The statement shall containthe details of the amount collected on behalf of each supplier in respect of all supplies of goods and/or services effected through the operator and the details of such supplies during the said calendar month. A snapshot of the prescribed format of return in this regards is produced hereunder so as to bring out an understanding as regards the details that shall be required to be furnished (and for that matter, be maintained as records) by the E-Commerce Operators.

Input Credit to the Supplier

The amounts collected by the E – Commerce Operator as discussed above and paid to the credit of the appropriate Government shall be deemed to be a payment of tax on behalf of the concerned supplier and the supplier shall claim credit, in his electronic cash ledger, of the tax collected and reflected in the statement of the operator filed.

Matching of records with Supplier

The details of supplies and the amount collected during a calendar month, and furnished by every operator shallbe matched with the corresponding details of outward supplies furnished by the concerned supplier in his valid return for the same calendar month or any preceding calendar month.

Where the details of outward supply, on which the tax has been collected, as declared by the operator do not match with the corresponding details declared by the supplier, the discrepancy shall be communicated to both persons in within prescribed time.

The value of a supply relating to any payment in respect of which any discrepancy is communicated and which is not rectified by the supplier in his valid return for the month in which discrepancy is communicated, shall be added to his output liability for the calendar month succeeding the calendar month in which the discrepancy is communicated.

The concerned supplier in whose output tax liability any amount is 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.

Calling of records from E-Commerce Operator

Any authority not below the rank of Joint Commissioner may, by notice, either before or during the course of any proceeding under this Act, require the operator to furnish such details relating to:

– supplies of goods and/or services effected through such operator during any period, or

– stock of goods held by the suppliers making supplies through such operator in the godowns or warehouses, by whatever name called, managed by such operators and declared as additional places of business by such suppliers – as may be specified in the notice.

Every operator on whom a notice has been served shall furnish the required information within five working days of the date of service of such notice.

Any person who fails to furnish the information required by the notice served shall, without prejudice to any action that is or may be taken be liable to a penalty which may extend to rupees twenty-five thousand. Here, the expression ‘concerned supplier’ shall mean the supplier of goods and/or services making supplies through the operator.

Free Education Guide on Goods & Service Tax (GST)


SR No

Topic -GST

Resources

1

Model GST Law

Model GST Law

2

GST Overview

Goods and Services Tax (GST): An Overview

Integrated Goods & Service Tax (IGST) Act Overview

Meaning and Scope of Supply

Time of Supply

Place of Supply of Goods and Service under GST

Valuation in GST

Levy of GST & Exemption from Tax

Job Work under Goods & Service Tax (GST)

Electronic Commerce under Goods & Service Tax (GST)

3

Transition to GST

Transitional Provisions in Goods & Service Tax (GST)

4

Registration

GST Registration FAQ’s

GST Registration Process -Video

GST -Draft Registration Rules

GST -Draft Registration Formats

5

Invoice

GST Draft Invoice Rules released by CBEC

GST Draft Invoice formats Released by CBEC

6

Input Tax Credit

Input Tax Credit under Goods & Service Tax (GST)

Concept of Input Service Distributor in Goods & Service Tax (GST)

7

Payment

GST Payment of Tax

GST Draft Payment Rules Released by CBEC

GST Draft Payment formats Released by CBEC

8

Refunds

Refund under GST

Draft GST Refund Forms released by CBEC

Draft GST Refund Rules released by Govt

9

Returns

Returns Process and matching of Input Tax Credit under GST

Draft GST Return Rules Released by Govt

Draft GST Return Formats released by Govt

10

Assessment and Audit

Assessment and Audit under GST

11

Inspection, Search, Seizure and Arrest

Inspection, Search, Seizure and Arrest under GST

12

Offences, Penalty, Prosecution & Compounding

Offences, Penalty, Prosecution & Compounding in GST

13

Demands and Recovery

Demands and Recovery under GST

14

Appeals and Review

Appeals, Review and Revision in GST

15

Advance Ruling

Advance Ruling in Goods and Service Tax (GST)

16

Settlement Commission

Settlement Commission in Goods and Service Tax (GST)

17

GST Portal

Frontend Business Process on GST Portal

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