GST- E- Commerce Provisions

Electronic commerce means supply of goods and/or services including digital products over digital or electronic network;

Electronic commerce operator means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce;

The provisions relating to electronic commerce are governed by Section 8(4) and Section 56 of the Central/State Goods and Service Tax Act, 2016.

Liability to pay GST

Section 8(4) of the act states that the central or a State Government may, notify certain categories of services tax on which shall be paid by electronic commerce operator

If the electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax

If the electronic commerce operator does not have a physical presence in the taxable territory and also he does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax.

TCS liability

Section 56 of the act states that in respect of other than services notified under Section 8(4), the electronic commerce operator, not being an agent, shall collect tax at source at the rate of one percent net value of taxable supplies made by it during the month, provided the consideration for such supplies have been collected by the electronic commerce operator.

Hence the responsibility to collect TCS arises only

 a)   if he does not supply the goods or services specified under section 8(4)

       b)   if he does not act in the capacity of agent and

       c)    if the consideration is collected by the electronic commerce operator himself.

Here the term “net value of taxable supplies” means the value of taxable supplies of goods or services as reduced by the aggregate value of taxable supplies returned to the suppliers.

The amount collected as TCS shall be deposited to the government within ten days from the end of the month of collection.

Every such electronic commerce operator such furnish a return in GSTR-8 containing details supplies made by it, returned to it and amount collected as TCS within 10 days from the end of month of collection.

The supplier of the goods or services who supplied through electronic commerce operator can claim the credit of TCS in his electronic cash ledger.

The details in the return GSTR-8 will be matched with the GSTR-1 return of the supplier. If there is a discrepancy in the details furnished between both the returns, the discrepancy will be communicated to both the supplier and electronic commerce operator and the shall be asked to rectify the same.

If the discrepancy is not rectified, the output tax liability would be added to the supplier and the supplier shall pay the GST liability.