FAQ ON ELECTRONIC COMMERCE-PART-I

GST Update 20.10.2016

GST DAILY DOSE OF UPDATION:-

FAQ ON ELECTRONIC COMMERCE-PART-I:- With the advent of increased use of technology and online transactions, the new taxation reform also covers electronic commerce within its ambit. This update covers clarifications issued with respect to E-Commerce transactions.

Question no. 2:-An E-Commerce operator is person who directly or indirectly owns, operates or manages an electronic platform for facilitating supply of goods/services but does not cover person who supplies goods/services on his own account. Example- Amazon and Flipkart are e-commerce operator as they provide platform for supply of goods by others but Titan selling watches online through its official website is not e-commerce operator. It is necessary to understand whether person is considered as e-commerce operator or not because it is mandatory for e-commerce operator to obtain registration without any threshold limit.

Question no. 4:-This clarifies that threshold exemption is not available to suppliers supplying goods/services through e-commerce operator. This would again be a setback for many suppliers as in today’s world, most of the sales are being made through e-commerce operators only.

Question no. 5:-Aggregator means a person who owns and manages an electronic platform and by means of application and communication device, enables a potential customer to connect with persons providing service of a particular kind under the brand name or trade name of the said aggregator. For example-OLA cabs. The difference between aggregator and e-commerce operator is that aggregator operates under brand name or trade name. It is also mandatory for aggregator to get registered irrespective of the value of supply made.

Question no. 7:-An e-commerce operator is liable to deduct an amount out of the consideration paid or payable to the actual supplier of goods/services made through such operator. The amount so collected is called as Tax Collected at Source (TCS). This mechanism is presently implemented in Income Tax Act and is imported into the GST regime.

Question No. 9:-It is clarified that the amount collected by the operator is to be paid to the credit of appropriate government within 10 days after the end of the month in which amount was collected. Moreover, the operator is also required to file a Statement electronically containing details of amount collected by him within 10 days of the end of calendar month. The Supplier can claim credit of TCS collected and reflected by the operator against adjustment of its tax liabilities.

We will carry some other questions in our next update.

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GST Update 20.10.2016

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