Title: Applicability of GST on E-Commerce
1E-Commerce
CA Rahul Dhuparh AM, RD, Taxmann.com
2E-Commerce
3Relevant Definitions
(44) Electronic commerce means the supply of
goods or services, including digital products
over a digital or electronic network (45)
Electronic commerce operator means any person
who owns, operates or manages a digital or
electronic facility or platform for electronic
commerce (5) Agent means a person, including
a factor, broker, commission agent, arhatia,
del-credere agent, an auctioneer or any other
mercantile agent, who carries on the business of
supply or receipt of goods or services on behalf
of another (13) Intermediary means a broker,
an agent or any other person, who arranges or
facilitates the supply of goods or services, or
securities, between two or more persons, but does
not include a person who supplies such goods or
services or securities on his own account
4Services listed under section 9(5)
- Following 3 services have been notified u/s 9(5)
of CGST Act, - Services by way of transportation of passengers
by a radio-taxi, motor-cab, maxi-cab
motorcycle - Services by way of providing accommodation in
hotels, inns, guest houses, clubs, meant for
residential or lodging purposes - Services by way of house-keeping, such as
plumbing, carpentering etc. - Except where the person supplying such service
through ECO is liable for registration u/s 22(1)
of the CGST Act - In all the above 3 cases liability to pay GST is
of ECO not of the actual supplier.
5Registration of an ECO.
Section 24 Mandatory Registration (iv)
Persons who are required to pay tax u/s 9(5)
(ix) Persons who supply goods or services,
other than section 9(5), through such ECO who is
required to collect TCS u/s 52 (x) Every ECO
who is required to collect TCS u/s 52
(Inserted by CGST Amendment Act) (xi) Every
person supplying OIDAR services from a place
outside India to a person in India, other than a
registered person N/N.65/2017-CT, Dated
15-11-2017
6Is every one making supplies through ECO required
to be registered?
For Goods Irrespective of their turnover limit,
suppliers are mandatorily required to get
registered in order to make supplies through an
ECO. For Services Through special exemptions
except services of section 9(5) Suppliers are
allowed to supply services up-to Rs. 20/10 lakhs,
through an ECO. Since such suppliers are not
liable for registration, ECO are not required to
collect TCS on supply of services being made by
such suppliers through their portal. N/N.65/20
17-CT, Dated 15-11-2017.
7Liability to pay GST in case of ECO
- Who is liable to pay tax for the goods or
services supplied by a supplier through ECO? - Generally, supplier of goods or services is
required to pay GST, except services covered by
Sec 9(5) for which ECO is required to pay GST in
respect of those services, taking an assumption
that these services are supplied by such ECO not
by the actual supplier all the provisions of
GST shall apply to such ECO. - Notification No. 17/2017-Central Tax (Rate),
Dated 28-6-2017
8Place of Supply of Services
- There are two legs involved in a single
transaction executed through a third party ECO. - Services provided by ECO to the Supplier (against
commission charged by ECO) - Goods or Services provided by the Supplier to the
actual recipient. - For determining the place of supply following two
aspects are required to be taken into
consideration - If Both the Supplier and the Recipient are
located in India. - If either the Supplier or the Recipient is
located outside in India.
9If Both the Supplier the Recipient are located
in India.
- The POS for such services shall be determined as
per the general rule i.e., Section 12(2) of the
IGST Act. - Supplies made to a registered person (B2B)
- Then the location of such registered person shall
be the place of supply. - Example, Mr. R (Registered person) supplied
watches through ECO worth Rs. 100,000 in the
month of July, 2019. ECO has charged commission
of 5 i.e., Rs 5,000 on total sales value, The
Place of supply for the commission charged by the
ECO shall be the location of Mr. R.
10If Both the Supplier the Recipient are located
in India.
- Supplies made to an un-registered person (B2C)
- Where the address of such un-registered person is
available. - Then such address shall be taken to be the place
of supply for such services. - Example, In the previous example, assuming Mr. R
is an un-registered person and supplying books
through such ECO, in this case, for the
commission charged by the ECO, the place of
supply shall be the location of Mr. R, as he
would have given at the time of becoming seller
with such ECO. - Where the address of such un-registered person is
not available. - Then the location of the supplier of services
shall be taken to be the place of supply.
11If either the Supplier or the Recipient is
located outside in India.
- The place of Supply for such services shall be
determined as per the general rule i.e., Section
13(2) of the IGST Act. - Location of recipient is available
- The place of supply for such services shall be
the location of the recipient of services. - Example, Mr. R supplied watches through a foreign
ECO worth Rs. 100,000 in the month of July, 2019.
ECO has charged commission of 5 i.e., Rs 5,000
on total sales value, The Place of supply for the
commission charged by the ECO shall be the
location of Mr. R. - Location of recipient is not available
- The place of supply in this case shall be the
location of supplier of services.
12Applicability of TCS from October 1, 2018
Relevant Section Rules of the CGST Act.
N/N .51/2018-CT, dated 13-9-2018
13Q A for to TCS,
- Is every ECO required to collect TCS?
- Every ECO, not being an agent, shall collect TCS,
of 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. - 1 exception, i.e., Supplier of services listed
u/s 9(5). - Rate at which TCS is required to be collected by
ECO? - ECO shall collect TCS at the rate of 1 of the
net value of taxable supplies made through it,
where consideration with respect to such supplies
is collected by it. - Is there any exemption on Gold, as the rate of
GST is only 3 and TCS on it would erode the
margin for the seller? - No such exemption from TCS has been granted.
N/N.52/2018-CT 2/2018-IT, dated 20-9-2018
14Q A for to TCS,
- Can an ECO pay the amount of TCS collected to the
government using the ITC available with them? - The amount as collected by the ECO shall be
deposited with the Government in cash only. There
is no provision of paying TCS collected by ECO
through utilizing ITC available with them. - Under multiple e-commerce model, Customer books a
Hotel via ECO-1 who in turn is collaborates with
ECO-2 who has agreement with the hotelier. In
this case, ECO-1 will not have any GST
information of the hotelier. Under such
circumstances, which ECO should be liable to
collect TCS? - TCS is to be collected by that ECO who is making
payment to the supplier for the particular
supply, which is in this case will be ECO-2.
15Q A for to TCS,
- Compliances to done by such ECO.
-
- The TCS collected by the ECO shall be deposited
by the 10th of the following month, during which
collection is made. He shall furnish a statement
in form GSTR-8, on monthly basis containing
details of supplies effected through it. - Also, he is required to file Annual Statement in
form GSTR-9B by 31st December following the end
of every financial year. (However till date no
such form has been notified). - Compliances to done by Supplier supplying through
ECO. - Such supplier shall be complying with the
required compliances in the normal fashion i.e.,
The amount of TCS collected and paid by the ECO
shall be reflected in suppliers GSTR-2A, the same
gets transferred to the cash ledger of the said
supplier, which can be used at the time of
discharge of tax liability in respect of the
supplies made him.
16THANK YOU