GST on E Commerce Operators & Online Sellers | Complete MasterClass #2

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MasterClass #1 - GST on GTA Services
https://youtu.be/UwwllfERTbI

This video shall be helpful who wish to start sell their products on an e-commerce platform and understand on the GST registration requirement , GST liability and Provision of Tax Collection at Source.

Every e-commerce transaction involves below three parties and two types of transactions:
1. Seller;
2. Buyer;
3. E- Commerce Operator (ECO)
Types of transaction:
1. Between Seller & Buyer – Sale of Goods ;
2. Between Seller & ECO – Provision of market place
GST shall be levied on both transactions:
Between seller & buyer: GST on entire value of goods/ services supplied (GST shall be paid by the supplier except in case of services specified u/s9(5))
Seller & ECO: GST on commission value/ other charges earned by ECO for providing market platform to seller. (GST shall be paid by the ECO)

As per the provisions of Section 22 of CGST Act,2017 registration under GST shall become mandatory only when the value of goods or services supplied exceeds threshold limit (In case of Goods-it’s Rs.40 Lakhs and in case of Services- its Rs.20 Lakhs). However Section 24 of CGST Act,2017 contains certain supplies which are required to get compulsorily registered irrespective of the threshold limit.
Under Section 24 (ix) of the CGST Act, every person supplying goods or services through electronic commerce operators are required to be compulsorily registered, without any threshold exemption limit. However, the Government has power to exempt specified supplier from registration. Vide Notification No. 65/2017-C.T., dated 15-11-2017; the Central Government, exempted persons making supplies of services, through an electronic commerce operator and having an aggregate turnover, to be computed on all India basis, not exceeding an amount of twenty lakh rupees in a financial year.
Thus, persons supplying services other than those mentioned in Section 9(5) of the CGST Act are required to register and collect GST only if their turnover is more than the threshold limit.
If your services are listed in Section 9(5) of CGST Act, then benefit of threshold limit shall be applicable, however till that E-commerce Operator shall be liable to pay i.e reverse charge mechanism provision shall become applicable.

E-commerce portals are charging a commission from various suppliers. It amounts to support services, falling under Tariff heading 9985, and shall attract GST at the rate of 18%. E-commerce portals are required to be compulsorily registered under Section 24(ix) of the CGST Act, and shall be paying GST on commission amount received, without availing any exemption threshold limit. The tax shall be charged in the invoices raised against supplier of goods or services; and such suppliers can avail ITC on such GST charged, if otherwise eligible.

Collection of tax at source (Section-52) : Every electronic commerce operator, not being an agent, shall collect TCS at such rate not exceeding 1% (1% CGST + 1% SGST), of the net value of taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the operator. Provision of Tax Collected at Source (TCS) has been introduced w.e.f. 1-10-2018. The rate for TCS is 1% for IGST for inter-state taxable supply

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DISCLAIMER ********
This video is for creating awareness about the newly introduced tax reform GST. This video is merely a general guide meant for learning purposes only. All the instructions, references, content or documents are for educational purposes only and do not constitute a legal advice.*******