impact on gst

GST impact on E-commerce Sellers

GST impact on E-commerce Sellers

GST impact on E-commerce Sellers


As we all are aware with the development of advanced technology in India and businessman is too taking advantage of this technology by buying and selling items online with the help of smartphones and internet connectivity. Many platforms such as Amazon, Flipkart, Jabong etc. are providing such a huge platform to reach a bigger market and increase their sales volume.


And, when there is an expansion of business, there is increase in Tax Compliances. One of those includes GST.


Know who is liable to register under GST


First of all, you must be clear if you are selling goods online through E – Commerce operator who owns, operates or manage an electronic facility or platform for buying and selling goods over digital network then as per section 24 of CGST Act, 2017 it is compulsory for you to take a GST Registration. It does not matter if your aggregate turnover in a financial year does not exceed the threshold limit i.e. INR 20 Lacs.


However, an exception for compulsory registration is provided  to supplier of services through e-commerce operator (like urban clap or other similar platforms) with notification 65/2017- central tax dated 15.11.2017. wherein if his turnover does not exceed threshold limit of 20 lacs and supplying services through E commerce platform then compulsory GST registration is not required.


It is important to note that if a person is selling goods & services through his own website then also he will be treated as ecommerce operator liable for compulsory registration as per section 24 of CGST Act, 2017 irrespective of threshold limit of INR 20 Lacs.


Know who is liable to pay GST


Once you have taken a registration and providing services or supplying goods online then you will charge GST on invoice in similar manner as you are selling your product to customer directly. There is no change in provision of place of supply, GST Rate, Valuation etc. After supplying the goods or services through E – Commerce operator you  become liable to pay GST to government and pay the tax while filing your monthly return.


However, an exception for paying tax in following services through E- Commerce operator has been provided where in GST is payable by e-commerce operator not service provider.


  1. Services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle.
  2. Services of House Keeping such as plumbering, Carpentering, House maid etc. For E.g. Urban Clap etc.
  3. Services of accommodation in hotel, inns, Guest house, Clubs, campsites or other commercial places meant for residential or lodging purposes For E.g. Make my trip, OYO Rooms, Hotel Trivago etc.


If you are providing  services mentioned in point 1 above then liability to pay GST is of E-Commerce operator (like OLA & Uber).


If you are providing  services mentioned in point 2 & 3 above  then liability to pay GST is of E-Commerce operator, provided you have not taken registration under GST. Thus, you need not to charge and pay any GST for the abovementioned services.




A customer has booked a Hotel Room of XYZ Hotel, which is an unregistered hotel through Make My Trip then XYZ hotel need not to charge GST from customer. It is the E commerce operator i.e. Make My Trip who will collect charges along with GST from customer and remit the charges after deducting its commission to XYZ hotel and pay the GST collected from customer to Govt.


If on the other hand XYZ Hotel is registered then XYZ hotel will charge GST itself through normal billing to customer and thereof pay GST to Govt. itself.


TCS provisions- To spot sellers who  are reporting inaccurate sales made through e-commerce operators (like Amazons, Flipkart etc)


As per section 52 of CGST Act, 2017 every E- Commerce operator will collect Tax @ 1% of the net value of taxable supplies made through it. It means the amount collected by E- Commerce operator on your behalf from customer, operator will remit the consideration to you after deducting 1% of net value of taxable supplies.


Net value of Taxable supplies means the aggregate value of Taxable supplies made during the month less the value of supplies returned to you during the said month.


For E.g. You have supplied goods of INR 1,00,000 in a month and goods amounting INR 30,000 has been returned then on INR 70,000 tax will be collected by E-Commerce operator amounting INR 700 and you will receive INR 69,300 from E-Commerce operator and if suppose the Goods returned is more than INR 1,00,000 due to previous month sales return in current month then net value of taxable supply become negative and it shall be ignored and no TCS will be applicable.


The TCS deducted by E – Commerce operator will be deposited by operator to the Govt. on or before the 10thday of following month and the same will be reflecting in your respective cash ledger after accepting the details furnished by E-commerce operator on  GST portal which  can be utilized for the payment of any GST liability .


The E- commerce operator will furnish a statement in which they will upload the aggregate amount of supplies made and returns during the said month along with tax collected. This should be matched with outward supplies and returns uploaded on the GST portal by seller to avoid any litigations.




India’s new GST system is designed to make taxes easier, especially for small businesses. But if you run an e-commerce company or selling through e-commerce platform, the rules are slightly more complicated. To make sure you’re keeping the right records and paying taxes correctly, it’s important to understand how the GST affects your online business.


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