GST FAQs

What is e-commerce?

Ans. Section 43B(d) of the MGL defines an Electronic Commerce to mean the supply or receipt of goods and/or services, or transmitting of funds or data, over an electronic network, primarily the internet, by using any of the applications that rely on the internet, like but not limited to e-mail, instant messaging, shopping carts, web services, universal description Discovery and integration (UDDI), File Transfer Protocol (FTP) and Electronic Data Interchange (EDI) whether or not the payment is conducted online and whether or not the ultimate delivery of the goods and/or services is done by the operator.

Who is an e-commerce operator?

Ans. Section 43B(e) of the MGL defines an Electronic

Commerce Operator (Operator) as every person who,

directly or indirectly, owns, operates or manages an

electronic platform which is engaged in facilitating

the supply of any goods and/or services. Also a person

providing any information or any other services incidental

to or in connection with such supply of goods and services

through electronic platform would be considered as an

Operator. A person supplying goods/services on his own

account, however, would not be considered as an Operator.

For instance, Amazon and Flipkart are e-commerce

Operators because they are facilitating actual suppliers

to supply goods through their platform (popularly called

Market place model or Fulfillment Model). However, Titan

supplying watches and jewels through its own website

would not be considered as an e-commerce operator for the

purposes of this provision. Similarly Amazon and Flipkart

will not be treated as e-commerce operators in relation

to those supplies which they make on their own account

(popularly called inventory Model).

Is it mandatory for e-commerce operator to obtain registration?

Ans. Yes. Section 19 r/w Schedule-III of the MGL, provides

that the threshold exemption is not available to e-commerce

operators and they would be liable to be registered

irrespective of the value of supply made by them.

Whether a supplier of goods/services supplying through e-commerce operator would be entitled to threshold exemption?

Ans. No. Section 19 r/w Schedule-III of the MGL,

provides that the threshold exemption is not available to

such suppliers and they would be liable to be registered

irrespective of the value of supply made by them.

Who is an aggregator?

Ans. Section 43B(a) of the MGL defines aggregator to mean

a person, who owns and manages an electronic platform,

and by means of the application and communication

device, enables a potential customer to connect with the

persons providing service of a particular kind under the

brand name or trade name of the said aggregator. For

instance, Ola cabs would be an aggregator.

Is an aggregator required to be registered under GST?

Ans. Yes. Section 19 r/w Schedule-III of the MGL, provides

that the threshold exemption is not available to aggregators

and they would be liable to be registered irrespective of the

value of supply made by them.

What is Tax Collection at Source (TCS)?

Ans. In terms of Section 43C(1) of the MGL, the e-commerce

operator is required to collect (i.e. deduct) an amount out

of the consideration paid or payable to the actual supplier

of goods or services in respect of supplies of goods and /

or services made through such operator. The amount so

deducted/collected is called as Tax Collection at Source (TCS).

At what time/intervals should the e-commerce operator make such deductions?

Ans. The timings for such collection/deduction are earlier of the two events:

(i) the time of credit of any amount to the account of the actual supplier of goods and / or services;

(ii) the time of payment of any amount in cash or by any other mode to such supplier.

What is the time within which such TCS is to be remitted by the e-commerce operator to Government account? Is the operator required to file any returns for this purpose?

Ans. In terms of Section 43C(3) of the MGL, 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 so collected. Further,

in terms of Section 43C(4) of the MGL, the operator is

required to file a Statement, electronically, containing

details of all amounts collected by him for the outward

supplies made through his Portal, within 10 days of the end

of the calendar month to which such statement pertains.

The said statement would contain the names of the actual

supplier(s), details of respective supplies made by them

and the amount collected on their behalf. The Form and

Manner of the said Statement would be prescribed in the

GST Rules.

How can actual suppliers claim credit of this TCS?

Ans. Such TCS which is deposited by the operator into

government account will be reflected in the cash ledger

of the actual registered supplier (on whose account such

collection has been made) on the basis of the statement

filed by the operator. The same can be used at the time of

discharge of tax liability in respect of the supplies by the

actual supplier.

Is the e-commerce operator required to furnish information to the Government?

Ans. Yes. In terms of section 43C(10), an officer not below the rank of Joint Commissioner may require the operator to furnish details relating to:

(i) supplies of goods / services effected through the operator during any period;

(ii) stock of goods held by actual supplier making supplies through such operator in the godowns or warehouses belonging to the operator and registered as additional place of business by the actual supplier.

The operator is required to furnish the above information within 5 working days from the date of service of notice asking such information. In case of failure to furnish such information, the penalty could be extended to Rs. 25,000/- .

Is the e-commerce operator required to submit any statement? What are the details that are required to be submitted in the statement?

Ans. Yes, in terms of Section 43C (4), every operator is

required to furnish a statement, electronically, of all amounts

collected as TCS towards outward supplies of goods and/or

services effected through it, during a calendar month within

ten days after the end of such calendar month. The statement

shall contain, inter alia, the details of the amount collected on

behalf of each supplier in respect of all supplies of goods and/

or services effected through the operator and the details of

such supplies during the said calendar month.

What is the concept of matching in e-commerce provisions and how it is going to work?

Ans. As per section 43C (6), the details of supplies and the

amount collected during a calendar month, and furnished

by every operator in his statement will be matched with the

corresponding details of outward supplies furnished by the

concerned supplier in his valid return filed under section

27 for the same calendar month or any preceding calendar

month. Where the details of outward supply, on which

the tax has been collected, as declared by the operator

in his statement do not match with the corresponding

details declared by the supplier the discrepancy shall be

communicated to both persons.

What will happen if the details remain mismatched?

Ans. As per section 43C (8), the value of a supply relating

to any payment in respect of which any discrepancy is

communicated and which is not rectified by the supplier

in his valid return for the month in which discrepancy is

communicated shall be added to the output liability of

the said supplier, for the calendar month succeeding the

calendar month in which the discrepancy is communicated.

The concerned supplier shall, in whose output tax liability

any amount has been added shall be liable to pay the tax

payable in respect of such supply along with interest, at

the rate specified under sub-section (1) of section 36 on the

amount so added from the date such tax was due till the

date of its payment.

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