E-commerce is one of the fastest-growing sectors in India right now. From a $64 billion market size in 2020, e-commerce is expected to cross $200 billion by 2027-28. As more and more people are getting comfortable in online shopping, the trend is picking up, and the concept of e-commerce is seeping deep into the nook and corner of every city, town, and village.
Those who are venturing into the e-commerce business have a very critical question:
- Is GST applicable for e-commerce?
- How much is the revenue threshold after which GST is applied?
Questions about e-commerce GST, e-commerce GST return for sellers, e-commerce GST registration for sellers, and more are being asked and enquired all around.
In this article, we will focus on answering these questions and guide you towards getting expert GST-related help, when it comes to the e-commerce business. But first, Is GST really required for e-commerce?
E-Commerce GST Registration: Is it Required?
Yes, every e-commerce seller and e-commerce operator needs to register under GST, and there is no threshold for the annual revenues. Hence, irrespective of the sale volume, e-commerce business owners such as e-commerce websites, sellers, etc. are required to register for GST.
Definition of E-Commerce as per GST Laws
As per Section 2(44) of CGST Act, 2017, e-commerce has been defined as “supply of goods or service or both including digital products over a digital or electronic network.”Whereas as per 2(45) of CGST Act, 2017, an e-commerce operator has been defined as “any person who directly or indirectly owns, operates, or manages digital or electronic facility or platform for e-commerce.”And as per Section 24(ix) of the CGST Act, 2017, there is no threshold for revenues, when it comes to both e-commerce and eCommerce operators. However, in case the eCommerce operators are liable to pay taxes on behalf of the suppliers, then there exists a threshold.
TCS or Tax Collected at Source for E-Commerce Operators
TCS or Tax Collected at Source for e-commerce is applicable, when the e-commerce operator collects the tax on behalf of the suppliers, who are supplying their goods and services to the end-users, via that e-commerce operator. In such cases, a TCS of 1% on the overall invoice is automatically applied for all goods and services sold. This TCS is collected by the e-commerce operator and should be deposited with the Govt within 10 days of the end of the month in which the tax has been collected. Hence, if any e-commerce transaction has been done in the month of October, GSTR-8 is due by the 10th of November.
E-Commerce GST Registration for Sellers
Ecommerce sellers and e-commerce operators can register under GST by visiting the GST portal at www.gst.gov.in, and then entering PAN, email id, phone number, and other details.
After that, the entire process for e-commerce GST registration is the same as that of any other business. You will need to –
- Generate Digital Signature,
- Enter business details such as partnership, or sole proprietor, limited or public company, and more.
- Once GSTIN is generated, you can download your Registration Certificate.
You can find complete details about e-commerce GST registration in this video from our MSMEx expert. Click to watch the video on MSMEx.in website.
E-Commerce GST Return for Sellers
Ecommerce operators are required to file GSTR 8 for GST return for e-commerce business. Since every e-commerce operator is mandated to collect 1% tax at the source during an e-commerce transaction, every e-commerce operator needs to file a GSTR8 return, irrespective of the amount threshold (exemptions in some cases)Examples being Flipkart and Amazon, which are marketplaces of online sellers, and they collect TCS from the end-users, on behalf of the sellers. Thus, both Amazon and Flipkart are required to file the GSTR 8 return for their e-commerce business.
Details Required Under GSTR 8 Filing
The e-commerce operator is required to file the following details under GSTR8 filing:
- GSTIN (in case GSTIN is not available, a provisional id can be filed)
- Name of the registered person, under which the GST registration has been done (it will auto-populate while filing GSTR8)
- Complete details about the supplies made via the e-commerce platform. This includes the gross value of supplies made, supplies returned to both registered and unregistered persons. This difference will be the net amount for TCS, which the e-commerce operator is liable to pay.
- Interest details: In case the TCS collected is not paid in time, then there will be interest charged on the amount payable
- Details about SGST, CGST, and IGST
- If there is any refund claimed from the electronic cash ledger.
Penalty for not Filing GSTR8 Within Due Date
In case the e-commerce operator is not able to file a GSTR8 return within the stipulated dates, then there is a provision of financial penalty on the e-commerce operator. While there will be Rs 100 penalty for CGST, there will be Rs 100 penalty for SGST, every day. A maximum of Rs 5000 penalty per day has been mandated, as per GST laws. For delay in IGST filing, there will be no penalty. Besides, 18% interest is also applicable to the overall amount due, besides the late fees charges.
Note here that GSTR revision is not allowed in the same filing. The errors, if any, can only be rectified and modified in the next filing. Ecommerce GST registration and e-commerce GST is a complicated process, wherein you will need help and assistance from tax experts, who have specialization in e-commerce.
MSMEx can instantly help you with that. Refer to our recorded lecture on the Important Steps to Start an E-commerce Business. We provide a micro-advisory platform, wherein you can get live mentorship and guidance from business experts. You can hire funding experts, MSME loan experts, income tax, GST experts, digital marketing ninjas, sales experts, business remodeling experts, and more. All you need to do is, Book an appointment with an MSMEx expert, and clear all your queries right now.