Alarming Situation For E- Commerce Operators (TCS) Under GST By CS Ekta Maheshwari


In recent years, e-commerce business has shown a remarkable progress in the Indian Economy. It seems like it has become the need of the nation in a short span of time to learn the impact of GST for all traders registered online on their on portal or those who have registered themselves on websites like Amazon, Flipkart, Snapdeal, Shopclues etc. This is because E- commerce operators also come under the ambit of GST. Unlike other sectors of economy, the Biggest Tax Reform i.e., GST has got great impact on e- commerce operators.

In this small write- up, I am making my efforts on understanding as to "How GST will impact e- commerce sectors ?" are being covered.

Introduction

Section 52 of CGST deals with electronic- commerce operators which says that: Every e- commerce operators (not an agent) is required to deduct 1% tax of the net value of taxable supplies and deposit the same with the Government.

In a layman term, e- commerce is defined as the use of electronic transmission medium (tele-communication) to engage in the exchange, including buying and selling of products and services requiring transportation either physically or digitally from location to location.


Let’s discuss how GST is going to impact e- commerce business.

Well; Following are the points, from which we can conclude that GST has got huge impact on e- commerce operators:

  • Every person falls in the ambit of GST Registration

Unlike in normal course, where GST is mandatory for those whose turnover exceeds Rs. 20 lakh, in case of e- commerce operators, every person who sells through online portals has to get itself registered.

Crux: If you are an e- commerce operator then threshold of Rs. 20 lakh has nothing to do in your business. You shall be required to obtain GSTIN having got GST Registration.

  • Uniform Tax Rate

Under Present Tax Structure, VAT is being levied on e-commerce operators, which varies from State to State. But under GST, there is a uniform tax rate where tax arbitrage rate is not possible.

  • Compliances under GST

Every e-commerce operator is required to collect tax at source under section 52 shall furnish a statement in FORM GSTR-8 electronically on the Common Portal; either directly or from a Facilitation Centre notified by the Commissioner; containing details of supplies effected through such operator and the amount of tax collected as required under section 52.

  • Benefit of composition scheme is not available

Under GST, there is no benefit of composition scheme for e- commerce operators.

Conclusion

The all new much awaited tax reform has a great impact on various sectors of economy. But from the above mentioned points, one can easily conclude that GST has got huge impact on e-commerce operators. That’s the only reason why top players like Flipkart, Amazon etc providing heavy discounts to ensure that their stocks are cleared before GST actually comes into picture. 

Author:

CS Ekta Maheshwari is the Author of this article and is Company Secretary by profession. The Author can be reached at csektamaheshwari14@gmail.com 

Disclaimer:

Kindly note here that the contents of this article is only for the information purposes prepared by the Author on the basis of relevant provisions, rules, notifications, circulars and as per the information prevailing at the time of the drafting of this write up. The Author and the Site www.blogs.compliancecalendar.in hereby do not propose to provide any sort of professional advice/service through this write up. Moreover, appreciate that any reliance on such article will not be considered as our advisory. Though, while writing the article, utmost care has been taken to mitigate the chances of errors or omissions by the Author. However, there is always room for some human errors or omissions. Therefore, it is earnestly requested from the readers to check at your end and confirm from any Professional before acting on any of the information’s provided herein above by the Author. Compliance Calendar LLP shall not be responsible for any loss or damage happened (if any).

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