Basic GST provisions for e-commerce operators. Procedures and rules for e-commerce. Applicability of GST provisions to both the suppliers as well as e-commerce operators.

1. BY CA NEMISH J. SHAH
E-COMMERCE UNDER GST

2. B2C E-COMMERCE
SEGMENTS
Online
Travel
Digital
Downloads
Financial
Services
Online
Retail
Online
Classifieds
Market
Place
Inventory
based
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3. E-COMMERCE MODELS
MMP
Aggregator
Models
Social
Network
OMM
Inventory
led model
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4. MANAGED MARKET PLACE
(MMP)
Places Order
Shipment received by
customer
Non-stocked
Items
Stocked
Items
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5. MANAGED MARKET PLACE
(MMP)
 Controls fulfillment
 Fast moving goods held on consignment
 Indirect influence on pricing and discounts
 Some products are also sold at marketplace by
sellers
 Lower Inventory and warehousing cost
 Control customer experience
 Platform for warehousing, logistics, order
fulfillment, call centre and payment collection
 Eg. Amazon
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6. OPEN MARKET PLACE (OMP)
Places Order
Shipment received by
customer
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7. OPEN MARKET PLACE (OMP)
 Product is directly shipped by re-seller to
customer
 No influence on pricing
 No inventory maintained by the online retailer
 Prone to quality and delivery issues
 Minimal capital investment required
 Example: eBay
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8. INVENTORY MODEL
Places Order
Shipment received by
customer
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9. INVENTORY MODEL
 Inventory maintained by online retailer
 Superior quality assurance to consumers
 Timely delivery to consumers as stocks are
maintained and monitored
 Capital Intensive model
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10. Electronic Commerce [Section 2(41)]
Supply of
Goods,
Services, Digital
Products
Digital/Electronic
Network
Includes supply of
e-books, vouchers,
software,
applications, online
games, movies,
music etc.
Includes order
through internet,
television, e-mail,
phone call etc.
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11. Electronic Commerce Operator [Section
2(42)]
Any person
Owns
Digital/electronic facility
Digital/electronic platform
Operates Manages
For electronic
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12. Electronic Commerce Operators
Amazon Ganna Quikr
Flipkart Homeshop18 Olx
Snapdeal Saavn Paytm
Shop Clues Hotstar Freecharge
Bookmyshow IRCTC Makemytrip
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13. Section 8(4): Levy of CGST and
SGST
 Tax on specified services supplied through e-
commerce operator shall be paid by the e-
commerce operator
and
 all the provisions of this Act shall be applicable to
him as if he is the person liable for paying the tax
in relation to the supply of such services
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14. Section 56: Collection of Tax at
Source
 E-commerce operator shall collect 1% of net
value of taxable supplies (net of returns) made
through it
 Where the consideration is to be collected by the
operator
 Exclusions in the above net value of taxable
supplies :
 Services notified u/s. 8(4)
 Operator is acting as an Agent (Logistics)
 Consideration is paid directly by the recipient to the
supplier.
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15. Operator collects
1% tax
Operator pays tax
and files GSTR-8
within 10 days
from month end
Details available
to supplier in Part
D of GSTR-2A for
verification
Simultaneously
GSTR-1 filed by
supplier
Automatic
Matching of
GSTR-8 with
GSTR-1
No error found -
OK
Supplier can claim credit of tax in Electronic Cash Ledger which is
collected by the operator and reflected in the return filed by operator.15

16. If discrepancy
found
Communicatio
n to both
parties in GST
ITC-1
If no
rectification by
either of
parties
Addition to
output tax liability
of supplier
(if operator
supply > supplier
supply)
In GSTR-3
return of next
month
Supplier to pay
tax + interest
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17. Section 56: Collection of Tax at
Source
 Joint Commissioner may serve notice to operator
for furnishing the following details:
 Details of supplies of goods or services effected
through such operator
 Stock of goods relating to supplier held by the
operator in his godown/warehouse and declared as
additional place of business by the supplier.
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18. REGISTRATION
Paragraph 6 of Schedule V:
 Persons who are required to pay tax u/s. 8(4)
irrespective of threshold limit
 Persons who are required to collect tax u/s. 56 –
e-commerce operators
 Supplier of goods/services to operators
irrespective of threshold limit
 Except specified services u/s. 8(4)
 Every e-commerce operator irrespective of
threshold limit
 every person supplying online information and
database access or retrieval services from a
place outside India to a person in India, other
than a registered taxable person
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