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GST on E-Commerce Operators (ECO)

Goods and Services Tax - GST - By: - CA.VINOD CHAURASIA - Dated:- 7-9-2017 - Introduction: This article discusses in detail about GST on E-commerce including the following: E Commerce Business Models Understanding on ECO Registration of ECO & applicable forms Specified services u/s 9(5) Tax collected at source Reporting Mismatch Penalty Declaration of warehouse maintained by ECO as additional place of business by multiple supplier- Any problem ???? Place of supply Reporting in GSTR-1 by ECO .....

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l customer. As an example, a wholesaler places an order from a company's website and after receiving the consignment, sells the end product to final customer who comes to buy the product at wholesaler's retail outlet. Business - to - Consumer (B2C) Website following B2C business model sells its product directly to a customer. A customer can view products shown on the website of business organization. The customer can choose a product and order the same. Website will send a notification t .....

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nsumer - to - Business (C2B) In this model, a consumer approaches website showing multiple business organizations for a particular service. Consumer places an estimate of amount he/she wants to spend for a particular service. For example, comparison of interest rates of personal loan/ car loan provided by various banks via website. Business organization who fulfills the consumer's requirement within specified budget approaches the customer and provides its services. Business - to - Governmen .....

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Government uses G2C model website to approach citizen in general. Such websites support auctions of vehicles, machinery or any other material. Such website also provides services like registration for birth, marriage or death certificates. Main objectives of G2C website are to reduce average time for fulfilling people requests for various government services. Definitions Electronic Commerce has been defined In Sec. 2(44) of the CGST Act, 2017 to mean the supply of goods or services or both incl .....

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ry Registration for ECO As per sec. 24(x) of the CGST Act, 2017 the benefit of threshold exemption of ₹ 20L or 10L is not available to e-commerce operators and they are liable to be registered irrespective of the value of supply made by them. Compulsory Registration for person supplying through ECO As per Section 24(ix) of the CGST Act, 2017, the threshold exemption is also not available to persons supplying goods or services through e-commerce operator and they would be liable to be regis .....

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plumbing, carpentering etc. Radio taxi, Motorcab, Maxicab, Motor cycle, Hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes other those liable for registration u/s 22(1) Related notifications Notification No. 17/2017- Central Tax (Rate) dated 28.06.2017, Notification No 14/2017-lntegrated Tax (Rate) dated 28.06.2017 Notification No. 23/2017- Central Tax (Rate) dated 22.08.2017, Notification No 23/2017-lntegrated Tax (Rate) dated 22.0 .....

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Levy and collection Every e-commerce transaction involves below 3 parties: Seller; Buyer; ECO. And it involves below 2 types of transaction: Between Seller & Buyer - Sale of Goods ; Between Seller & ECO - Provision of market place service. GST shall be levied on both transactions: Between seller & buyer = GST on entire value of goods / services supplied (GST shall be paid by the supplier except in case of Sec 9(5) services) Seller & ECO = GST on commission value / other charges e .....

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erator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax. Tax Collection at source u/s 52 Every ECO [other than an ECO who is required to pay tax under section 9(5)] is required to collect TCS @ 2% (1% CGST + 1% SGST) of the net value of taxable supplies made through it by other supplier where consideration with respect to a taxable supply is to be collected by such ECO. ECO should make the tax collection during the month in .....

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the amount collected by it as TCS during a month. The amount of TCS paid by the ECO to the government will be reflected in the GSTR-2 of the actual registered supplier (on whose account such collection has been made) on the basis of the GSTR-8 filed by the e-commerce operator. This TCS can be used at the time of discharge of tax liability in respect of the supplies made by the actual supplier. The operator is also required to file an annual statement in Form GSTR-9B by 31st day of December foll .....

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e value is more than ₹ 2.5 Lakhs) through ECO is to be reported in point no. 5B of GSTR-1 for every ECO & rate wise showing below details: GSTIN of ECO Invoice details Tax rate Taxable value Tax amount Place of supply Taxable outward inter-state supplies made to unregistered persons (where the invoice value is upto ₹ 2.5 Lakhs) through ECO is to be reported in point no. 7B of GSTR-1 for every ECO & rate wise showing below details: GSTIN of ECO Consolidated rate wise outward s .....

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supplier in his monthly or any preceding month GSTR-01. Where the details of outward supplies declared by the ECO in his monthly GSTR-08 do not match with the corresponding details declared by the actual supplier in his monthly GSTR-01, the discrepancy shall be communicated to both persons. The amount in respect of which any discrepancy is communicated and which is not rectified by the supplier in his GSTR-01 or by the ECO in his GSTR-08 for the month in which discrepancy is communicated shall b .....

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he ECO to furnish such details in respect of below items within a period of 15 working days from the date of service of such notice:- supplies of goods or services effected through such ECO; Stock of goods belonging to suppliers held in the godowns or warehouse managed by such ECO and declared as additional palace of business by such suppliers. Penalty for failure to comply with above notice u/s 52(13): up to ₹ 25,000/- u/s 122 Additional Place of Business Many sellers supplying goods thro .....

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uirements of maintaining records as per section 35 of the CGS T Act, 2017 and Rules 56 to 58 of the CGST Rules, 2017. Online Travel agents as ECO Online travel agents providing services through digital or electronic platform will fall under the category of ECOs liable to deduct TCS under Section 52 of the CGST Act, 2017. In cases of transaction involving 2 or more e-commerce operators, each transaction needs to be treated separately and examined according to the provisions of Section 52 of the C .....

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rnment. Any such amount collected will be available to the concerned supplier as credit in his electronic cash ledger. Query -2: Whether TCS is to be collected on exempted or zero-tax goods like books through e-commerce operators. Ans: TCS is to be collected on the net value of taxable supplies made through an e-commerce operators. When the supply itself is not taxable, the question of TCS does not arise. Query -3: If someone is selling his own products through a web site hosted by himself, then .....

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ax at source as per the provisions of this Section. These transactions will be liable to GST at the prevailing rates. Query- 4: What is the impact of GST on goods returned after Sale ? Ans: An e-commerce company is required to collect tax only on the net value of taxable supplies. In other words, the values of supplies which are returned are adjusted in the aggregate value of taxable supplies. As per explanation to sec. 52(1) : Net value of taxable supplies = Aggregate value of taxable supplies .....

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who owns, operates or manages digital or electronic facility or platform for electronic commerce; Sec. 2(45) of CGST Act, defines the term Electronic commerce as means the supply of goods or services or both, including digital products over digital or electronic network. So, an ECO cannot be considered to acting as agent or otherwise as required by section 10(1)(b) of IGST Act, 2017. Further to clarify this point, attention is invited to the opening lines of section 52(1) of CGST Act, which prov .....

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