Exploring E-Commerce under GST: Compliance, Definitions, and Recent Notifications

The E-commerce industry, fueled by internet technology and smartphone accessibility, has witnessed remarkable growth in India. This article delves into the concept of E-commerce under the Goods and Services Tax (GST), covering definitions, compliance requirements, and recent notifications.

1. Definition of E-commerce & E-Commerce Operators:

• E-commerce (Sec. 2(44) of CGST Act, 2017): The supply of goods or services or both, including digital products, over a digital or electronic network.
• E-commerce Operator (Sec. 2(45) of CGST Act, 2017): Any person owning, operating, or managing a digital or electronic facility or platform for e-commerce.

2. GST Registration for E-commerce Operators:

• Mandatory Registration: E-commerce operators must obtain GST registration regardless of the value of supplies, paying GST on the commission received without availing any exemption limit.
• Foreign E-Commerce Operator: Those without a physical presence in India must appoint an agent, register under GST, and register in each state of operation.

3. Liability to Pay GST for E-commerce Operators:

• Two distinct transactions involving the supplier, buyer, and e-commerce operator.
• Certain specified services mandate the e-commerce operator to pay GST on behalf of suppliers.

4. Collection of TCS under E-commerce:

• E-commerce operators collect Tax Collected at Source (TCS) at 1% on the net value of taxable supplies made through the online marketplace.
• TCS deposited appears in the GSTR-2A of suppliers, facilitating reconciliation.

GST Returns by E-Commerce Operators:

• Monthly filing of GSTR-1 and GSTR-3B.
• Submission of GSTR-8 within 10 days from the end of the calendar month, detailing outward supplies and TCS.
• Annual filing of GSTR-9B by December 31st.

Recent Notifications:

• Notification No. 34/2023- Central Tax (31st July, 2023):

  • Waives mandatory GST registration for suppliers with turnover within specified limits, supplying goods through E-commerce operators. Conditions apply.

• Notification No. 37/2023- Central Tax (4th August, 2023):

  • Prescribes a special procedure for E-commerce operators regarding supplies by unregistered persons. Details of supplies must be furnished in GSTR-8.

• Notification No. 36/2023- Central Tax (4th August, 2023):

  • Outlines a special procedure for E-commerce operators concerning supplies by composition taxpayers. TCS must be collected, and details furnished in GSTR-8.

Conclusion: The evolution of the digital economy and GST compliance complexities necessitate a thorough understanding of regulations. The recent notifications by the Central Board of Indirect Taxes and Customs (CBIC) provide flexibility for certain suppliers while outlining specific procedures for E-commerce operators. Staying abreast of these guidelines is crucial for seamless operations and adherence to GST regulations in the dynamic landscape of E-commerce.