GST is the single biggest tax reform in India aimed at replacing all indirect taxes like sales tax, service tax, VAT, customs duty, central sales tax, entertainment tax, luxury tax etc. GST is \u201cone indirect tax\u201d on the supply of goods and services, right from manufacturers to the end consumer for the entire country, which will make India one unified common market. In the current scenario, indirect tax is highly complex due to the multiplicity of taxes, compliances issues obligations, tax overlaps.<\/p>\n
What will be the impact of GST on e-commerce business?<\/span><\/h2>\nLet’s first understand what Electronic Commerce & Electronic Commerce Operator means under the ambit of GST: \u201cElectronic commerce\u201d is the supply of goods or services or both of them. This includes digital products sold over digital or electronic network; { as under Sec.2 (44) of CGST Act}<\/p>\n
An \u201cElectronic commerce operator\u201d is any person who owns, operates or manages the digital or electronic facility or platform for electronic commerce. { as under Sec.2 (45) of CGST Act}. Also, a person providing information or any other services incidental to or in connection with such supply of goods & services through electronic platform will be considered as an Operator.<\/p>\n
Here are few real-life examples to explain how different sellers in the online world will be affected by GST:<\/strong><\/span><\/h3>\n1. Direct Supply from Seller to Customer: –<\/strong>
\nSellers who have their own website for their business and do not rely on other online aggregators for the listing of goods. In this case, Central GST (CGST)\/State GST (SGST) shall be charged by a seller in case of an intrastate transaction and IGST in case of an interstate transaction.<\/p>\nEg: Rahul orders a book from bookshop.com. The online website shall be maintained by the seller – Bookshop & the invoice of the book has to be generated by Bookshop and shall levy GST on the product sold.<\/p>\n
2. Supply from Seller to Customer via online Aggregators\/Intermediary: –<\/strong>
\nProducts of sellers are listed on websites of aggregators. These orders are in turn given to the Seller for delivery of the goods. Here, the seller has to make the invoice & deliver the same to the customer directly. The invoice shall contain the name of the company\/firm, Reg. Address, TIN\/CST no. etc.<\/p>\nExample: Mr. Rohan orders the latest mobile from the Online aggregator. The aggregator will now book an order on behalf of the Seller named XYZ Retailer. So, the aggregator will ask XYZ Retailer to deliver goods to the customer. Here, the seller XYZ shall levy GST on the goods. The aggregator shall generate an invoice and charge GST according to the services given to the seller like Courier, Shipping charges, Booking, Commission etc in the name of the seller. Invoice to be charged can vary according to T&C contained in MOU with sellers. Eg – If goods are delivered by e-commerce platform to the customer then shipping charges shall be charged by platform in the bill.<\/p>\n
3. Sellers to Online Portal to Customers: –<\/strong>
\nHere, online portals buy goods from sellers and then these portals sell to final customer i.e. the inventory has to be bought by the portal. Role of e-commerce site shall not be limited to provide interface but also to become the owner of the goods.<\/p>\nFor example, Mr. Sourabh orders portable speaker from the Online Website ABC, this site will book order & purchase the goods from Shashi Electronics to deliver the goods to Customers. The invoice of the said speaker will now be created by Shashi Electronics including TIN No. and addressed to the Website – ABC. Now, ABC will issue an invoice to Customer.<\/p>\n
Who needs to be GST compliant?<\/span><\/strong><\/h2>\nThe following type of businesses need to register:<\/p>\n
\n- Any business crossing the threshold limit<\/a><\/li>\n
- Existing businesses registered with the central (Excise \/ Service Tax) or state (VAT) authorities<\/li>\n
- Taxable person carrying on an interstate supply<\/li>\n
- Businesses liable under reverse charge in GST ambit<\/li>\n
- Businesses wanting to collect GST or claim input (despite being below threshold) can take voluntary registration<\/li>\n<\/ul>\n
How to become compliant?<\/span><\/strong><\/h2>\nRegistration process for a new seller<\/strong>
\nA seller has to fill in registration application in less than 30 days of crossing the prescribed threshold \/ starting of a business. Here, the date of application would be considered the effective date of registration for obtaining Input Tax Credit (ITC).<\/p>\nRegistration Process for an existing sellers<\/strong>
\nAll sellers registered with central or state tax authorities would be migrated to GST by default and allotted Goods and Service Tax Identification Number (GSTIN). Sellers falling below the threshold may continue to be registered and get benefits of GST credit chain or opt out themselves.<\/p>\nGSTIN:<\/strong><\/span><\/h2>\nIt is a 15 digit PAN based number with state code & business vertical details as shown below:<\/p>\n
1. Direct Supply from Seller to Customer: –<\/strong> Eg: Rahul orders a book from bookshop.com. The online website shall be maintained by the seller – Bookshop & the invoice of the book has to be generated by Bookshop and shall levy GST on the product sold.<\/p>\n 2. Supply from Seller to Customer via online Aggregators\/Intermediary: –<\/strong> Example: Mr. Rohan orders the latest mobile from the Online aggregator. The aggregator will now book an order on behalf of the Seller named XYZ Retailer. So, the aggregator will ask XYZ Retailer to deliver goods to the customer. Here, the seller XYZ shall levy GST on the goods. The aggregator shall generate an invoice and charge GST according to the services given to the seller like Courier, Shipping charges, Booking, Commission etc in the name of the seller. Invoice to be charged can vary according to T&C contained in MOU with sellers. Eg – If goods are delivered by e-commerce platform to the customer then shipping charges shall be charged by platform in the bill.<\/p>\n 3. Sellers to Online Portal to Customers: –<\/strong> For example, Mr. Sourabh orders portable speaker from the Online Website ABC, this site will book order & purchase the goods from Shashi Electronics to deliver the goods to Customers. The invoice of the said speaker will now be created by Shashi Electronics including TIN No. and addressed to the Website – ABC. Now, ABC will issue an invoice to Customer.<\/p>\n The following type of businesses need to register:<\/p>\n Registration process for a new seller<\/strong> Registration Process for an existing sellers<\/strong> It is a 15 digit PAN based number with state code & business vertical details as shown below:<\/p>\n
\nSellers who have their own website for their business and do not rely on other online aggregators for the listing of goods. In this case, Central GST (CGST)\/State GST (SGST) shall be charged by a seller in case of an intrastate transaction and IGST in case of an interstate transaction.<\/p>\n
\nProducts of sellers are listed on websites of aggregators. These orders are in turn given to the Seller for delivery of the goods. Here, the seller has to make the invoice & deliver the same to the customer directly. The invoice shall contain the name of the company\/firm, Reg. Address, TIN\/CST no. etc.<\/p>\n
\nHere, online portals buy goods from sellers and then these portals sell to final customer i.e. the inventory has to be bought by the portal. Role of e-commerce site shall not be limited to provide interface but also to become the owner of the goods.<\/p>\n Who needs to be GST compliant?<\/span><\/strong><\/h2>\n
\n
How to become compliant?<\/span><\/strong><\/h2>\n
\nA seller has to fill in registration application in less than 30 days of crossing the prescribed threshold \/ starting of a business. Here, the date of application would be considered the effective date of registration for obtaining Input Tax Credit (ITC).<\/p>\n
\nAll sellers registered with central or state tax authorities would be migrated to GST by default and allotted Goods and Service Tax Identification Number (GSTIN). Sellers falling below the threshold may continue to be registered and get benefits of GST credit chain or opt out themselves.<\/p>\nGSTIN:<\/strong><\/span><\/h2>\n
![\"gstin\"](\"https:\/\/blog.payumoney.com\/wp-content\/uploads\/2017\/06\/Screen-Shot-2017-06-27-at-2.12.01-PM-1024x104.png\")
<\/a><\/p>\n