Impact of GST on E-Commerce Marketplace Sellers (Online Businesses)
- Marketplace is an e-commerce platform owned by the E-commerce Operator such as Flip kart, Snap deal and Amazon. Some of the features of a marketplace model are:
- The supply of goods or service or both including digital products over digital or electronic network.
- Any person, who directly or indirectly owns, operates or manages digital or electronic facility or platform for e-commerce.
GST Registration for the person selling through e-commerce operator:
For the person who undertakes supplies through e-commerce websites, it is mandatory to obtain GST registration irrespective of the value of supply made by them. The application for registration must be applied irrespective the ownership of the websites or portal through which supplies are made.
No Benefit under Composition Scheme:
This composition scheme is introduced to reduce the Tax burden for small, medium scale businesses, Under this scheme, businesses are required to file returns quarterly instead of monthly and pay taxes at nominal rates up to 2%.
However GST excluded composition scheme for E-Commerce
Tax Collection at Source:
It is mandatory to deduct a percentage amount as the GST liability of seller and deposit it with government. This mechanism is being termed as “Tax Collection at Source (TCS)” under the GST law. Eventually the marketplace seller will have to file monthly return under GST to claim the credit of TCS collected by the marketplace operator.
TCS is calculated and deducted at the rate of 1% of the net value of the goods or services supplied through the ecommerce operator.
For example, if the net value of goods sold through an ecommerce operator is Rs.1 lakh, then the ecommerce operator would be required to deduct and remit Rs.1000 on behalf of the supplier as Tax Collected at Source or TCS.
The amount of TCS deducted by an ecommerce operator and remitted to the Government will be provided as credit while filing GSTR-2 return. While filing GSTR3 or GSTR3B return, TCS remitted by an ecommerce operator can be used to setoff GST liability.
GST Return Filing for E-Commerce
GSTR – 8 returns 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.
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.
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 whose account such collection has been made) on the basis of the statement filed by the e-commerce operator.
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:—
- GSTIN of the supplier;
- GSTIN or UIN of the recipient, if the recipient is a registered person;
- State of place of supply;
- GST Invoice number of the supplier;
- Date of invoice of the supplier;
- Taxable value; and
- Tax amount
Some of the key points that should be kept in mind are:
- Get your GST enrolmentdone on time,
- Plan your logistics and warehousing requirement carefully.
- Adopt such knowledge-consult a chartered accountant get all updates and enable your business with GST compliance