Irrespective of sectors, GST has a noticeable impact on each and every business. e-Commerce sector is also not an exception. Registration under GST is mandatory for all e-commerce operators irrespective of the sales turnover. Within 30 days of commencing business, an e-commerce operator is required to get registered under GST.
There can be two types of e-commerce sellers:
Section 52 is only applicable for ecommerce operators. According to the section:
Note: Similar to TDS, TCS (Tax Collection at Source) is a mechanism under GST. Here, the ecommerce operator collects a portion of tax from the supplier at the time of supply of goods/services.
The rate of TCS to be collected is 1% for ecommerce operators. However, any dealers/traders selling goods/services online would get the payment after deduction of 2% tax(i.e, 1% CGST and 1% SGST). Such tax laws result in a lot of increased compliance and administration cost for online aggregators like Amazon, Snapdeal, Flipkart, etc. These parties need to deposit the amount of TCS by the 10th day of subsequent month. Also, it is mandatory for all dealers to get registered under GST even if their turnover is less than INR 20,00,000 to claim deducted tax.
Ms. Rekha is a dealer who sells her ready-made handbags online on Flipkart. She received a bulk order worth INR 25,000 inclusive of all taxes and commission. Here, Flipkart charges a commission worth INR 500 (i.e. 2% TCS). Under GST, Flipkart needs to deduct 2% TCS and 18% GST (i.e. INR 500 and INR 4500).
Note: As per 22nd GST Council meeting held on 6th October 2017, Provisions of TDS & TCS, deferred to 1st April 2018.
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