Applicability of GST on E-Commerce - PowerPoint PPT Presentation

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Applicability of GST on E-Commerce

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GST on E-commerce: Find the relevant definitions of Electronic Commerce, Services notified under section 9(5) of CGST Act, Registration of an ECO, Services listed under section 9(5), Pay GST in case ECO, etc. Stay updated with us and get GST real time updates. Start your 7 days free trial here: – PowerPoint PPT presentation

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Title: Applicability of GST on E-Commerce


1
E-Commerce
CA Rahul Dhuparh AM, RD, Taxmann.com
2
E-Commerce
3
Relevant 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
4
Services 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.

5
Registration 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
6
Is 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.
7
Liability 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

8
Place 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.

9
If 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.

10
If 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.

11
If 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.

12
Applicability of TCS from October 1, 2018
Relevant Section Rules of the CGST Act.
N/N .51/2018-CT, dated 13-9-2018
13
Q 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
14
Q 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.

15
Q 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.

16
THANK YOU
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