GST (the Goods and Services Tax) is an indirect tax that has substituted multiple indirect taxes in India such as the excise duty, VAT, services tax, etc. The Goods and Service Tax Act was enacted in the Parliament on 29th March 2017 and is effective since 1st July 2017.
In other words, Goods and Service Tax (GST) in India is imposed on the supply of goods and services.
Goods and Services Tax Law in India is a complete, multi-stage, destination-based tax that is imposed on every value addition. GST is the sole domestic indirect tax law for the entire country.
E-Commerce has grown remarkably in India as more users are purchasing and selling items online, gratitude to smartphones, and internet connectivity. earlier tax laws, there was no clear operation of online sales. GST has proper laws in place for e-commerce portals like Amazon and its sellers.
Who operates E-Commerce under GST Law?
According to Goods and Service Tax Law, an E-Commerce Operator shall cover every person who, directly or indirectly, owns, works, or manages an electronic platform that is involved in facilitating the supply of all goods and/or services or in giving any information or any other services related to or in connection therewith but shall not involve persons involved in supply of such goods and/or services on their own account.
Types of E-commerce platforms
- E-commerce executive/marketplace (e.g. Flipkart, Amazon, etc): It is an entity that owns, works, or manages digital or electronic facility or platform for E-commerce.
- Suppliers/aggregators on an E-commerce platform: It is an entity that provides goods or services on an E-commerce platform.
GST return filing for E-commerce operators and sellers
- The sellers/aggregators who are enrolling themselves for the E-commerce platform shall enroll themselves under GST.
- There are various returns to be filed under GST for E-commerce sellers and operators.
- Unlike regular businesses, there is no threshold exception for E-commerce suppliers and operators.
- These E-commerce substances come below the GST permission irrespective of the value of supply and hence are obliged to file GST returns online.
- GST return filing form includes the details such as purchases, sales, output GST and Input Tax Credit (ITC) which are to be offered on a monthly, quarterly, or annual basis.
GST rules for ecommerce business
- Monthly Details of outside sales by the seller in FORM GSTR-1 by the 10th of next month.
- Monthly Details of buying made by the seller in FORM GSTR-2 by the 15th of next month.
- Monthly Filing of return accompanying with the payment of tax in FORM GSTR-3 by the 20th of next month.
- Monthly Filing of GST return of E-commerce executive in FORM GSTR-8 by the 10th of next month.
- Annual Filing of Return in FORM GSTR-9 by 31st December of the next financial year.
How many types of GST returns are applicable for e-commerce?
- E-commerce suppliers/aggregators are needed to register under Form GSTR-1, GSTR 2, GSTR 3 monthly, and GSTR-9 to be filed annually.
- E-commerce operatives are needed to file their GST return in form GSTR 8 on monthly basis.
Let’s have a look at different types of GST in India:
Form GSTR 1
- GSTR 1 is a monthly return filed for sales or outward supplies.
- Every business filed under Goods and Services Tax must file GSTR 1.
- The due date for filing GSTR 1 for E-commerce sellers would be the 10th day of the following month.
Form GSTR 2
- GSTR-2 is a monthly return for incoming supplies of goods or services or both received during a tax period.
- The filing of GSTR 2 makes them eligible to avail Input Tax Credit wherein the taxpayer can demand the refund of tax on purchases or decrease that much amount from the tax payable on outward supplies.
- The due date for GSTR 2 would be the 15th of the subsequent month.
Form GSTR 3
- GSTR-3 is a consolidated monthly return that includes details of tax liability along with the tax received on outward supplies and tax paid on incoming supplies by listed E-commerce supplier/seller.
- It is an auto-populated process through GSTR-1 and GSTR-2 of the registered person.
- The due date for GSTR 3 return filing would be the 20th of the next month.
Form GSTR 8
- GSTR 8 is one of the most essential forms which needs to be taken complete care of for an E-commerce operator.
- GSTR 8 is a statement that must be registered by E-commerce GST operators every month. It must hold the details of supplies made to customers by the taxpayer’s E-commerce portal by both registered taxable persons and unregistered persons, customer’s basic knowledge, the amount of tax collected at source(TCS) (to be counted at 1%), the tax owed, and tax paid.
- The monthly due date for GSTR 8 would be the 10th of the following month.
Form GSTR 9
- All the taxpayers listed under GST including E-commerce sellers and operators are required to register their annual returns in a particular form. That form is called the GSTR 9.
- GSTR-9 consists of details about the supplies made and received during the year under various tax heads i.e., CGST, SGST, and IGST.
- It combines the information provided in the monthly/quarterly returns during the particular year.
- The due date to file the GSTR-9 is 31st Dec of the preceding year.
It is necessary for e-commerce operators (as defined above) to get GST registration irrespective of the state of supply made by them.
GST Registration for the person trading through e-commerce executive: All the members who offer supplies through e-commerce websites, should mandatorily get GST registration irrespective of the cost of supply made by them. The item selling through an ecommerce portal under GST applies for the GST registration irrespective of the ownership of the websites and goods provided.
Services Notified u/s 9(5) of CGST Act, 2017: In case services notified u/s 9(5), the e-commerce operator is subject to pay tax, on account of the suppliers. If such services are provided through its platform, all the provisions of the Act shall implement to such e-commerce operator as if he is the supplier for this purpose
Should e-commerce operators need to file GST returns?
Yes, ecommerce operators should mandatorily register GSTR-8 every month and register a GST annual report. In the monthly GSTR-8 return, GST for online sellers India provides details of outside supplies of goods or services made by sellers by the platform and the amount of TCS assembled.
How to File GST Returns Online?
From manufacturers and suppliers to dealers and consumers, all taxpayers have to deposit their tax returns with the GST department each year. Below the new GST regime, filing tax returns has become automatic. GST returns can be registered online using the software or apps given by Goods and Service Tax Network (GSTN) which will auto-populate the details on every GSTR form. Listed below are the steps for registering a GST return online:
Visit the GST portal (www.gst.gov.in).
A 15-digit GST identification number will be assigned based on your state code and PAN number.
Upload invoices on the GST portal. An invoice reference number will be allotted against each invoice.
After uploading invoices, outward return, inward return, and the cumulative monthly return has to be registered online. If there are any errors, you have the choice to correct them and refile the returns.
File the outside supply returns in GSTR-1 form by the information section at the GST Common Portal (GSTN) on or before the 10th of the subsequent month.
Details of outward supplies provided by the supplier will be made available in GSTR-2A to the recipient.
Recipient has to check, validate, and change the details of outward supplies, and also file details of credit or debit notes.
Recipient has to provide the details of inward supplies of taxable goods and services in GSTR-2 form.
The supplier can either accept or deny the modifications of the details of inward supplies made ready by the recipient in GSTR-1A.
Though the compliance under GST on online services has grown, still it develops the market for the local suppliers as they can exchange in any state with the same tax rates. This will encourage more sellers to go online and present the best services to the customers. Also, each