The procedures to operate an E-commerce under GST is explained in simple words to avail everyone. However, Important steps are emphasized by GST Consultants in Chennai in this article.

As per section 2(44) of the CGST 2017 regulation Act, E-Commerce is a platform that plays a dominant role in the Indian market and economy as well. The process of supplying goods and providing services in a digital platform through a smart device; both digital and physical products. The procedure for operating an E-commerce firm under GST is as follows:

Facts to know:

1. If a person trading products or providing service through his website is not E-commerce.   Operators who sell the products of a third party are known as E-commerce. For instance, Amazon, Flipkart, E-bay are E-commerce operators.

2. Person registered on marketing or establishing sites- Justdial, Indiamart, received an order to supply is not considered as E-commerce.

Explanation of TCS:

TCS is known as the tax collected at source which is to be collected by the operator, not by agent, not ex ceding 1% (1% SGST+ 1% CGST) of the net value of the taxable income made through the opetator’s platform where the supplies to be collected by the operator. TCS is 1% for IGST for Inter-state taxable supply. The net value can be expressed as the aggregate value of the supplies and services which had made in any month by all taxable persons through the operator. The deposited TCS by an E-commerce operator will appear in GSTR-2A. The suppliers can use this form to discharge their GST liability.

Requirements for Registration:

For registration under GST for an E-commerce operator, turnover is not considered here.  However, they have to register despite the threshold limit of Rs. 10 lakhs.

1. Online Trading:

Persons using online platforms or E-commerce operators to sell their products are known as E-commerce sellers. They have to register before selling a product if their turnover is less than Rs. 40 lakhs. E-commerce seller is responsible for the collection of GST and required to pay for the government.

2. Providing Online services:

For other than Section 9(5): Sellers who are providing their services online ought to have registered under GST even their income is more than the threshold of Rs. 20 lakhs. If not registered then the GST is not liable. The seller should collect the GST under this section and have to pay to the Government.

Section 9(5): E-commerce operators cannot register under the composition scheme of GST even the turnover exceeds the threshold limits. Anyone who provides service online should register under the regular scheme. Here the operator is responsible for collecting and paying GST to the Government.

3. State-wise Registration:

An operator should register under each state if he supplies goods and services for different states. He can mention the place of the headquarters as the business place and file from there. However, if he has suppliers in other states he can show his headquarters base as place of business and file all the documents from the place of headquarters.

4. Application form for registration:

GST form 7 should be filed by the operator. The name of the state where the TCS should be collocated is indicated in part A. Part B will indicate the principal place of business. This will take place according to the Rule 12(A) of CGST.

5. Certificate of Registration:

After the submission of the GST form to the concerned office, once the verification is over, the certificate will be in your hand within three working days. The registration will completed if the officer grant registration after due verification. The process of certification will be done as per rule 12(2) of CGST Regulation Act.

6. Cancellation of Registration:

The Registration can be cancelled after submitting the form GST REG-08 electronically as per 12(3) of GST Rules. This can be done completely after hearing, enquiry and verification. The registration can be done only after the notice.

Concept of Matching:

As the name denotes, there should be matching in the invoices of both Supplier and E-commerce operator. The invoice filed by the operator should match the returns filed by the supplier. If there is any mismatch, either supplier or operator should rectify or the failed person should take the responsibility to pay the tax along with the interest for the subsequent month. The process of matching comes under the sections 52(8), 52(9), 52(11) of GST act 2017.

Monetary Collection:

There are three parties and two transactions method involved in the E-commerce transactions:

The three parties:

1. Seller.

2. Buyer.

3. E-commerce operator.

The two transactions:

1. Between Seller and Buyer: The total GST value of goods and supplies, except services under section 9(5) shall be paid by the suppler t the buyer.

2. Between Seller and E-commerce operator: Here the GST shall be paid by the operator for providing his platform. GST shall be collected on commission value.

Things to Know:

1. Operators should provide all the information if an official in the tax department wishes to seek it. A fortnight will be given to the operator to furnish the details.

2. Warehouse should be registered by the supplier even if it is not as same as the headquarters. It can be added as an additional place for the business.

3. No tax will be collected for the goods under exempted or Zero-tax goods sold through the market place of the operator. The value of tax for goods is mentioned as nil.

4. When GST is under reverse charge mechanism TCS is not applicable.

5. TCS is not required, as mentioned above when a product is sold through the seller’s platform.

6. Composition scheme is not applicable for E-commerce operators. They are not allowed to register under the composition scheme.

7. TCS provisions do not apply to the import of goods and services.

For the best services on GST Registration in Chennai contact our GST experts at phoenix tax who could help you with registration, filing, and all GST-related services.