Guide on Applicability of GST on E-commerce Operators

E-Commerce Operator - Meaning

E-commerce operator has been defined as a person who supplies good or services or both, including digital products over digital network/world. It includes the person who sells his own goods or services and also includes the person who works as an aggregator like Amazon, Uber etc.

Formalities under GST:

1. Points to be noted by all E-Commerce operators

  • Compulsory registration regardless of the turnover for the year. Threshold limit of Rs. 20 lakh/10 lakh is not applicable for e commerce operators.

  • Not allowed to register under composition scheme by e commerce operators.

  • Suppliers who are selling goods or services through such operator are also required to register even if turnover is below threshold limit subject to exception mentioned below.

2. Specific requirements for different types of electronic commerce operators

a. For e-commerce operator who sells only own goods or services:-

They have to collect the GST from the customers and deposited as any other registered person.

b. For e-commerce aggregators selling goods or providing services NOT notified under section 9(5)

In this case the suppliers selling goods or services through e commerce operators are liable for getting registration regardless of turnover.

E-commerce operator is also required to collect TCS under section 52 at the rate of 1% of net taxable supplies**.

**Net taxable supplied refers to the amount of sales less amount of sales return. The suppliers will get the Input tax credit of such TCS amount.

c. For e-commerce aggregators providing services which are notified under section 9(5)**

Such persons are required to pay GST as if such services are supplied through it. As the e-commerce operator himself is liable for collection and deposit of gst, there is no question of TCS under section 52.

**Services notified in section 9(5):

(i) Services by way of transportation of passengers by a radio-taxi, motor cab, maxi cab and motor cycle. Ex. Ola, Uber, fast track, NTL Taxi

Note: These services are also covered under section 9(3) i.e reverse charge. And it is also notified via notification no. 5/2017 that if a supplier provides only those services on which entire tax is paid on reverse charge then such supplier is not required to get registration. So, if there is a person operating cars through ola and has turnover of Rs. 21 Lacs then also he is not required to register.

(ii) Services by way of providing accommodation in hotels, inns, guest houses, clubs, or other commercial places, except where the person supplying such service through electronic commerce operator is liable for registration due to turnover beyond threshold limit. For example: OYO, Makemytrip, Red Bus

Therefore if a hotel has turnover of more than Rs. 20 lacs then section 9(5) is not applicable and hotel itself is liable to get registered and pay GST.

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