E-Commerce as explained in Section 2(44) of the CGST Act, 2017. It has been explained as the supply of goods or services over the electronic network. Also, the person who directly or indirectly manages the electronic business/facility/platform is an e-commerce operator. And as per Section 2(45), this person needs to get GST registration for e-commerce.

In India e-commerce has taken a growth route at a very fast pace. It is said that the e-commerce business in India will reach US$99 billion by 2024. India will also become the second largest e-commerce market after the US. Many Global players such as Google, Facebook, Amazon have also made a huge amount of investments in the Indian e-commerce market. Hence, CBIC has provided special provisions concerning GST registration for e-commerce.

If you are planning to venture into e-commerce, here is the post explaining the process of GST registration for e-commerce and its taxability.

GST Registration for E-Commerce

• Every e-commerce operator mandatorily needs to get GST registration for e-commerce irrespective of the supply made by them.
• The business needs to apply for GST registration for e-commerce irrespective of the ownership of the goods and websites.
• As prescribed in Section 9(5) of the CGST Act: The e-commerce operator needs to pay tax on behalf of its suppliers. If the e-commerce operator is the supplier for the purpose of providing services specified in the Act, all the provisions of the Act will apply to him.

Tax Collected at Source (TCS) for e-commerce

• The TCS or Tax collected at the source is a mechanism where the e-commerce operator collects tax when the supplier supplies the needed goods or services through its portal.
• TCS is deducted at a rate of 1% on the net value of the supplied goods or services done by the e-commerce operator. This means that the e-commerce operator must deduct tax @1% of the net value of the taxable supplies.
• The e-commerce operator must collect TCS for the supplies made by the operator from the customers and then transfer them to the actual supplier.
• The e-commerce operator first of all for all these needs to get GST registration for the e-commerce website and then remit the Government before 10 days after the end of the month for the invoice created.
• TCS is available for credit at the time of filing the GSTR-2 return.

Who is Eligible to Deduct TDS after GST Registration of E-Commerce?

The below-mentioned entities deduct TDS under GST:

• Authorized Local Authorities
• An establishment that has been established by the Central or State Government
• PSUs
• Government Agencies
• The authority or board set up by an Act of Parliament or State Legislature
• The society is formed by Central/State governments or local bodies.
• The board is set up by authority Central/State Government with 51% active participation through control or equity.

The TDS is deducted at the rate of 1% on the payments done to the suppliers of the goods or services that are taxable. Here the entire value of such supply has been made with an individual contract crossing the amount of Rs. 2.50,000.

Procedure to Get GST Registration for E-Commerce Websites

• Any e-commerce operator willing to collect TCS or deduct TDS needs to submit an application electronically for GST registration for e-commerce operators.
• The application should be signed/verified by way of EVC or Expanded as Electronic Verification Code with the help of FORM GST REG-07 in the common portal.
• It should be done either directly or from the Facilitation Centre reported by the Commissioner.
• After this, the proper authorized officer will confer GST registration for e-commerce after the completion of the verification process.
• Also, the officer will then issue a Certificate of GST registration for e-commerce operators using Form GST REG-06.
• The certificate will be issued within a time limit of three working days from the date of submission of the application.

Cancellation Process for GST Registration for e-commerce Websites

• If the GST officer finds out that a person does not need to collect TCS or deduct TDS anymore then he will cancel the registration.
• The cancellation of GST registration for e-commerce must be communicated to the respective person in Form GST REG-08 electronically.
• Even in the case of normal taxpayers, the same procedure must be followed.

Conclusion

GST registration for e-commerce operators is mandatory irrespective of the sales turnover. Hence, before commencing a business or within 30 days of commencement of business an e-commerce operator must get GST registration for e-commerce websites. Persons making supply through the e-commerce websites like Amazon and Flipkart also needs to obtain GST Registration for e-commerce business irrespective of sales turnover.

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