GST on E-Commerce Transactions, GST on Electronic Commerce

GST on E-Commerce Transactions, GST on Electronic Commerce. E-Commerce has actually been always a matter of confusion and obscurity with respect to taxation aspect. This article will deal with GST (Goods and Service Tax) levy arrangement with regard to E- Commerce transactions. Just recently we supply total details for GST Registration, GST Login Procedure, GST Rates 2018, GST Return Online Process, GST Refund Details, HSN Code List etc. Now check more details about “ GST on E-Commerce Transactions” from listed below …

GST on E-Commerce Transactions

Why taxing E-Commerce Transactions is especially tough?

  • Existence of multiple parties to deals. For e.g. For Flipkart, there are almost around 10-12 major classifications divided into much more subcategories.This will yield a lot of dealers trading through Flipkart platform with various customers.This actually produces a substantial problem to recognize and link the tax liability for provider or sellers.
  • Digital platform makes it difficult to trace limits with respect to tax territory, where the transaction includes parties from different countries.For.e.g., which dominates in various nations, involving sellers and customers from such areas.
  • Multiple phases throughout a deal will make it challenging to determine the taxing event.for e.g. when an Indian consumer purchases a product from American seller, there might be online payment, after which there would be delivery and after such shipment, the deal will close.It is difficult regarding figure out whether this transaction will be taxed on starting or payment or on shipment.

E-commerce: Place of Supply

Services Provided by E- comm Operator to provider

  • Place of Supply of Service– Gen Rule will apply– Always area of Service receiver– considering that obligatory registration.

Services Provided by E- comm Operator to provider of transportation of items

  • Place of Supply of Service– Sec 12( 9) of IGST Act
  • location of Service receiver( if signed up) or
  • area at which such goods are turned over for their transportation

Supply of goods/Provision of Service by supplier to consumer

  • For Goods: Place of Supply– Where movement of items terminates for delivery.
  • For Services: to signed up individual( B2B): Registered address of recipient: to unregistered individual( B2C): Address on record of individual

Situation of E-Commerce platforms under GST law and their effect

The Government has actually revealed and proposed a levy under GST framework for E- Commerce transactions. According to the Draft GST law, the Digital platform which carry out E- Commerce services will be accountable to gather TCS (Tax Collected at Source) from the suppliers. The E– Commerce platforms will likewise accountable for filing the period returns.

Supplier and E-commerce platform– The return submitted by the E-Commerce platform with respect to supplies will be matched with private supplier returns.In case of any inconsistency, the tax liability under GST will be redetermined. This will raise the expense of compliance of the E-Commerce platform.

Small scale organization liability– The TCS collection by digital platform from provider is regardless the threshold for the small scale business. This would need even small companies (listed below tax threshold) to pay the tax and later on obtain refund. This will obstruct thin margins on which the suppliers are transacting, since it will reduce the profit margin by increased expense of compliance.

Cancellation or return policy– TCS in advance will result in tax event before materialization of sale transaction.In case of cancellation or return policy, TCS already collected will need to be made an application for as refund or will be considered for netting off the tax liability. This will result in paying interest on own capital by the digital platform.This would obstruct the operating capital cycle for both E-Commerce operator and suppliers.

Where E-Commerce sells at discount— In case of sale at discount rate, the E-Commerce platform will gather tax on amount. This would contribute to tax burden on the E-Commerce platform as it will pay tax on amount but will be costing lower rates (after discount).


GST structure will be changing all items and service related indirect taxes like VAT, Service tax etc. Even though, the tax liability on e-Commerce transactions can not be rejected, it can certainly be advanced by categorising the same for B2B and B2C transactions.It will likewise be interesting to see how the tax jurisdiction and tax liability will be determined with regard to E-Commerce deals.

Must Read–

  • GST Refund
  • GST Return
  • GST Forms
  • GST Rate
  • GST Registration
  • What is GST?
  • GST Invoice Format
  • ITC under GST
  • HSN Code
  • GST Login
  • GST Rules
  • GST Status
  • Track GST ARN
  • Time of Supply

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