GST | TCS on E-Commerce – A Take by Novello

What is E-commerce?

As per Section 2(44) of the CGST Act, 2017, electronic Commerce means the supply of goods or services or both, including digital products over digital or electronic network.

From the definition, E commerce means the supply of goods or services or both over digital or electronic network the definition per se includes digital products (such as E-books, podcasts).

Who is an e-commerce operator?

As per Section 2(45) of the CGST Act 2017, “electronic commerce operator” means any person who owns, operates, or manages digital or electronic facility or platform for electronic commerce.

Therefore, from the definition it can be understood that a person should own, operate, or manage an electronic facility such as a portal in order to qualify as an E-commerce Operator.

What is Tax Collected at Source and who ought to collect TCS?

The concept of Tax collection at Source, which is more of an amount deducted than a tax collected, was introduced to the world of GST ecosystem and more for so for E-com operations.

It is very important to understand the feature of Section 52 of the Act. The extract of the same is as below.

“52. Collection of tax at source.— (1) Notwithstanding anything to the contrary contained in this Act, every electronic commerce operator (hereafter in this section referred to as the ―operator), not being an agent, shall collect an amount calculated at such rate not exceeding one per cent., as may be notified by the Government on the recommendations of the Council, 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.

Explanation. ––For the purposes of this sub-section, the expression ―net value of taxable supplies‖ shall mean the aggregate value of taxable supplies of goods or services or both, other than services notified under sub-section (5) of section 9, made during any month by all registered persons through the operator reduced by the aggregate value of taxable supplies returned to the suppliers during the said month.

(2) The power to collect the amount specified in sub-section (1) shall be without prejudice to any other mode of recovery from the operator.

(3) The amount collected under sub-section (1) shall be paid to the Government by the operator within ten days after the end of the month in which such collection is made, in such manner as may be prescribed.

(4) Every operator who collects the amount specified in sub-section (1) shall furnish a statement, electronically, containing the details of outward supplies of goods or services or both effected through it, including the supplies of goods or services or both returned through it, and the amount collected under sub-section (1) during a month, in such form and manner as may be prescribed, within ten days after the end of such month:

[Explanation: – For the purposes of this sub-section, it is hereby declared that the due date for furnishing the said statement for the months of October, November and December 2018 shall be the [07th February 2019].]

[Provided that the Commissioner may, for reasons to be recorded in writing, by notification, extend the time limit for furnishing the statement for such class of registered persons as may be specified therein:

Provided further that any extension of time limit notified by the Commissioner of State tax or the Commissioner of Union territory tax shall be deemed to be notified by the Commissioner.]

(5) Every operator who collects the amount specified in sub-section (1) shall furnish an annual statement, electronically, containing the details of outward supplies of goods or services or both effected through it, including the supplies of goods or services or both returned through it, and the amount collected under the said sub-section during the financial year, in such form and manner as may be prescribed, before the thirty first day of December following the end of such financial year

[Provided that the Commissioner may, on the recommendations of the Council and for reasons to be recorded in writing, by notification, extend the time limit for furnishing the annual statement for such class of registered persons as may be specified therein:

Provided further that any extension of time limit notified by the Commissioner of State tax or the Commissioner of Union territory tax shall be deemed to be notified by the Commissioner.]

(6) If any operator after furnishing a statement under sub-section (4) discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection, or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars in the statement to be furnished for the month during which such omission or incorrect particulars are noticed, subject to payment of interest, as specified in sub-section (1) of section 50:

Provided that no such rectification of any omission or incorrect particulars shall be allowed after the due date for furnishing of statement for the month of September following the end of the financial year or the actual date of furnishing of the relevant annual statement, whichever is earlier.

(7) The supplier who has supplied the goods or services or both through the operator shall claim credit, in his electronic cash ledger, of the amount collected and reflected in the statement of the operator furnished under sub-section (4), in such manner as may be prescribed.

(8) The details of supplies furnished by every operator under sub-section (4) shall be matched with the corresponding details of outward supplies furnished by the concerned supplier registered under this Act in such manner and within such time as may be prescribed.

(9) Where the details of outward supplies furnished by the operator under sub-section (4) do not match with the corresponding details furnished by the supplier under [section 37 or section 39], the discrepancy shall be communicated to both persons in such manner and within such time as may be prescribed.

(10) The amount in respect of which any discrepancy is communicated under sub-section (9) and which is not rectified by the supplier in his valid return or the operator in his statement for the month in which discrepancy is communicated, shall be added to the output tax liability of the said supplier, where the value of outward supplies furnished by the operator is more than the value of outward supplies furnished by the supplier, in his return for the month succeeding the month in which the discrepancy is communicated in such manner as may be prescribed.

(11) The concerned supplier, in whose output tax liability any amount has been added under sub-section (10), shall pay the tax payable in respect of such supply along with interest, at the rate specified under sub-section (1) of section 50 on the amount so added from the date such tax was due till the date of its payment.

(12) Any authority not below the rank of Deputy Commissioner may serve a notice, either before or during the course of any proceedings under this Act, requiring the operator to furnish such details relating to—

(a) supplies of goods or services or both effected through such operator during any period; or

(b) stock of goods held by the suppliers making supplies through such operator in the go downs or warehouses, by whatever name called, managed by such operator, and declared as additional places of business by such suppliers, as may be specified in the notice.

(13) Every operator on whom a notice has been served under sub-section (12) shall furnish the required information within fifteen working days of the date of service of such notice.

(14) Any person who fails to furnish the information required by the notice served under sub-section (12) shall, without prejudice to any action that may be taken under section 122, be liable to a penalty which may extend to twenty-five thousand rupees.

Explanation. —For the purposes of this section, the expression ―concerned supplier‖ shall mean the supplier of goods or services or both making supplies through the operator.

Analysis of the salient features of Section 52 setting out the TCS operation.

As per Section 52 of the CGST Act, 2017 the e-commerce operator, not being an agent, is required to collect an amount calculated at the rate not exceeding one per cent., as notified by the Government on the recommendations of the Council, of the net value of taxable supplies made through it, where the consideration with respect to such supplies is to be collected by such operator. The amount so collected is called as Tax Collection at Source (TCS). It is also pertinent to note from the definition that TCS is to be collected only on the following circumstances:

1. The section 52 starts with a Non obstante clause to say “Notwithstanding anything to the contrary contained in this Act” it is vital to bear in mind that this non obstante clause will reign supreme when an analysis is done on the same.
2. The E commerce operator should not be an agent of the underlying supplier.
3. The TCS to be collected on the net value of Taxable supplies.
4. The TCS to be collected only when the consideration is to be collected by the E-commerce operator.
5. The Net value of taxable supplies indicate the aggregate value made through the operator reduced by returned supplies during the said month.
6. The TCS so collected by the E commerce operator payable to the government within 10 days after the end of the month.
7. The underlying supplier to claim the credit of the TCS paid by the E commerce operator

Therefore, it can be understood that TCS is not a tax, but an amount. Thus, the same shall be credited to the electronic cash ledger of the supplier making the supplies through an E-Commerce operator.

Will a supplier having inventory supplying on his own online portal be an e-commerce operator?

Yes, as per the definition of e-commerce operator, it is any person who owns, operates, or manages digital or electronic facility or platform for electronic commerce.

This is not to say that an E-Commerce operator who maintains his own online portal will be liable to collect the TCS even though he collects the consideration being both the E-Commerce operator as well as the underlying supplier.

Will a supplier having inventory supplying on his own online portal be liable to collect TCS?

No, although a supplier having inventory supplying on his own portal is an e-commerce operator, he won’t be liable to collect TCS.

For a TCS liability to arise, a supplier has to make taxable supplies through another e-commerce operator. Only when a taxable supply is made through an e-commerce operator, there shall arise a TCS liability for the e-commerce operator.

The word ‘through’ (made through it by other suppliers) has to be emphasised while determining TCS liability. Therefore, an e-commerce operator who is liable to collect TCS can be characterised with having zero inventory and just acting as online marketplace where the buyers and sellers meet. The critical parameter for collection of TCS is also that the material should be supplied through an E-Commerce operator of the supply made by other suppliers and where the consideration is to be collected through the E-Commerce operator.

What is the current rate of TCS levied?

At present the rate notified by the Government on recommendations of the GST Council is 0.5% (Notification No.52/2018 – Central Tax). Therefore, 0.5 % CGST and 0.5% SGST is required to be collected in the case of intrastate supplies and 1% IGST (Notification No.02/2018 -Integrated Tax) Is required to be collected in case of Interstate supplies.

While the collection is made as IGST or C+ S, it is to be borne in mind that the collection of TCS is an amount to be retained by the E-Commerce operator to be remitted to the Government and to be eventually passed on to the underlying supplier after due verification that the underlying supplier has in fact made the appropriate payment of tax.

If exempt supplies are supplied by a supplier through an e-commerce operator, is there any TCS liability for the e-commerce operator?

No, there is no TCS liability if exempt supplies are made through an e-commerce operator.

Whether the TCS is to be collected on supplies on which the recipient is required to pay tax on reverse charge basis?

No, TCS Is not required to be collected on supplies on which the recipient is required to pay tax on reverse charge basis.

Whether the TCS is required to be collected in respect of supplies made by composition taxpayer?

As per section 10(2)(d) of the CGST Act, 2017, a composition taxpayer cannot make supplies through e-commerce operator. Thus, question of collecting TCS in respect of supplies made by the composition taxpayer does not arise. To reiterate the composition dealer or the taxpayer cannot in fact make a supply through the E-Commerce operator at all.  

On what Value is the TCS collected?

TCS is collected on the net value of taxable supplies made through the e-commerce operator.

Explanation to Section 52 of the CGST Act 2017, “net value of taxable supplies” shall mean the aggregate value of taxable supplies of goods or services or both, other than services notified under sub-section (5) of section 9, made during any month by all registered persons through the operator reduced by the aggregate value of taxable supplies returned to the suppliers during the said month.

Let us consider an example. In April when 200 units of a product (taxable) are supplied by a supplier through an e-commerce operator, the e-commerce operator has to levy TCS on 200 units. In May, if the underlying supplier has supplied 100 units of the same product but has a return of 120 units of the same product, since net quantity Is negative, no TCS is required to be collected.

Will the e-commerce operator have TCS obligations if the consideration is collected by the supplier making the supplies through the e-commerce operator?

On a careful reading of Section 52, it can be understood that for a TCS obligation to arise to an e-commerce operator, the consideration has to be collected by the e-commerce operator and then remitted to the supplier after withholding the TCS amount.

If the supplier collects the consideration directly from the recipient of supplies without the e-commerce operator collecting consideration at any stage, then the e-commerce operator has no obligation to collect TCS.

If the E-Commerce operator has an escrow accounts with the majority of the underlying suppliers, they should still collect TCS as the legislative provision is all about the consideration being collected by the E-Commerce operator.

1. At what time should the e-commerce operator collect TCS?

TCS is to be collected once supply has been made through the e-commerce operator and where the business model is that the consideration is to be collected by the e-commerce operator irrespective of the actual collection of the consideration.

For example, if the supply has taken place through the e-commerce operator on 30th October but the consideration for the same has been collected in the month of November, then TCS for such supply has to be collected and reported in the statement for the month of October.

The definition of consideration also substantially supports the above stand taken. According to Section 2(31) of the CGST Act of 2017: –

“consideration” in relation to the supply of goods or services or both includes

1. any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government”

The words made or agreed to be made underlines the fact that TCS has to be collected on the full consideration even when it is actually not collected. This would take certain amount of criticality if there is a discount that is offered during the time gap of placing an order with the underlying supplier and the actual supplies effected by the E-Commerce operator.

What are the GST implications to the e-commerce operator if services specified under section 9(5) are supplied through it?

The e-commerce operator shall himself be liable to collect GST in such a case. There is no TCS obligation to the e-commerce operator, as explanation to Section 9(5) states that the net value of taxable supplies made through an e-commerce operator shall not include the

value of services specified under Section 9(5). The supplier won’t have any obligation in respect of both GST collection as well as TCS collection

As per 9(5) of the CGST Act of 2017, the Government may, on the recommendations of the Council, by notification, specify categories of services the tax on intra-State supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services

Currently the following services have been notified:

• Services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motorcycle; – Notification No. 17/2017-Central Tax (Rate).
• Services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites, or other commercial places meant for residential or lodging purposes, except where the person supplying such service through electronic commerce operator is liable for registration under sub-section (1) of section 22 of the said Central Goods and Services Tax Act. – Notification No. 17/2017-Central Tax (Rate).
• Therefore, a supplier providing such accommodation services through an e-commerce operator shall be liable to collect the GST only when he is liable to registered under Section 22(1) (when aggregate turnover exceeds the threshold limit). In other cases where the suppliers are not liable to be registered under Section 22(1), the e-commerce operator shall collect GST.
• Services by way of housekeeping, plumbing, carpentering, etc except where the person supplying such service through electronic commerce operator is liable for registration under sub-section (1) of section 22 of the said Central Goods and Services Tax Act. – Notification No. 23/2017-Central Tax (Rate).

Therefore, a supplier providing such housekeeping plumbing, carpentering services, through an e-commerce operator shall be liable to collect the GST only when he is liable to registered under Section 22(1)

1. When are e-commerce operators liable to be registered?

The relevant provisions in this regard are Section 24(iv) and Section 24(X) which specify compulsory registration irrespective of turnover.

Section 24(iv) states that person who are required to pay tax under sub-section (5) of section 9 must mandatorily register. Therefore, e-commerce operators through whom services specified under 9(5) are supplied must be compulsorily registered.

Section 24 (x) states that every electronic commerce operator who is required to collect tax at source under section 52 shall be compulsorily registered.

1. When are suppliers of goods or services supplying through an e-commerce operator be liable to be registered?

• As per Section 24(ix) of the CGST Act, 2017, every person supplying goods or services or both, other than supplies specified under Section 9(5) through an e-commerce operator liable to collect TCS as per Section 52, shall be mandatorily required to register irrespective of the value of supply made by him. Therefore, any person supplying taxable goods (For e.g., fast food joints) through an e-commerce operator must compulsorily register.
• However, a person supplying services, other than supplier of services under section 9 (5) of the CGST Act, 2017, through an e-commerce platform are exempted from obtaining compulsory registration provided their aggregate turnover does not exceed the threshold limit. – Notification No 65/2017 – Central Tax dated 15th November 2015.
• Supplier of services specified under Section 9(5) shall be liable to register only if the aggregate turnover exceeds the threshold limit.

Whether e-Commerce operator is required to obtain registration in every State/UT in which suppliers listed on their e-commerce platform are located to undertake the necessary compliance as mandated under the law?

As per the extant law, registration for TCS would be required in each State / UT as the obligation for collecting TCS would be there for every intra-State or inter-State supply.

It may be noted that each State/UT has indicated one administrative jurisdiction where all e-commerce operators having business (but not having physical presence) in that State/UT shall register. The proper officer for the purpose of registration of ECOs has also been notified by each State/UT

What are the TCS implications for the e-commerce operator in case the recipient of supplies adopts COD as a payment method?

In the case of Cash on Delivery (COD), the e-commerce operator has to collect TCS when the delivery is accepted by the customer. In case of COD also, it will tantamount to saying that the E-Commerce operator has collected the consideration.  In cases where the customer doesn’t accept the delivery, then the TCS has to be collected on the net value of supplies made through the e-commerce operator as non-acceptance of products will amount to returns.

In case of returns under the COD methodology, the concept of the aggregate value of supplies will trigger resulting in how much of a TCS is payable by the E-Commerce operator between the total sales value of the underlying supplier set off by the total return value of the same underlying supplier.

What are the TCS implications for the e-commerce operator in case the recipient of supplies opts for EMI as a payment method?

There can be 2 types of EMI arrangements in the case of e-commerce.

• In the first case, the supplier and banks have a tie up where banks collect the EMI, retain the interest, and remits the principal back to the supplier. In this case as the e-commerce operator has no obligation to collect the payment for supplies made through them, the e-commerce operator does not have any obligation to collect TCS on the same. This is the case as seen in most of the e-commerce transactions.
• In the second case, the e-commerce operator itself offers EMI through a partner bank, where the banker collects the interest and remits the principal back to the e-commerce operator who in turn remits the principal to the supplier. In this case since the e-commerce operator gets the principal payment before the suppliers does and hence has to collect the TCS on the net value of taxable supplies made through it.

Now the question arises as to on what value TCS is to be collected. Is it be collected on the EMI amount monthly or on the entire net value of supply made?

The answer to that question lies in the definition of consideration as per   Section 2(31) which reads out that consideration shall include any payment made or to be made for supply of goods or services. Therefore, the TCS shall be collected on the entire value and

not the EMI amount monthly since the definition of consideration includes future payments to be made also.

For e.g.: If a product is supplied for INR.90,000 with payment option of 10 EMIs of INR 9,000 each, the TCS has to be collected on the entire INR 90,000 during the month in which supply has been made.

What are the TCS implications for the e-commerce operator in case the recipient of supplies opts for Online Payment as a payment method?

In case the supply is made through the e-commerce operator and payment by online means is collected by the e-commerce operator, then the e-commerce operator has to collect TCS on net value of taxable supplies made by the registered supplier. If the payment is directly collected by the underlying supplier when supply is made through e-commerce operator, then the e-commerce operator need not collect TCS.

What are the TCS implications for the e-commerce operator, when the E-Commerce operator and the supplier opt for an escrow account?

In case of an escrow account, an e-commerce operator opens one joint account in the name of several suppliers and itself and collects the consideration in that particular account. The amount is then released to the suppliers’ individual accounts only when a particular condition is satisfied. For e.g.: 50% of the amount is released when invoice is raised and the remaining 50% of the amount is released when the goods are accepted by the customer.

In this case, since the recipient has no right to withdraw the amount unless conditions are satisfied, it is of our opinion that e-commerce operator has to collect TCS on the same unless the terms of the arrangement of the collection of the consideration is directly to the account of the underlying supplier.

What are the TCS implications in case of sales returns?

Sales return without acceptance:

In cases where the customer doesn’t accept the delivery, then the TCS has to be collected on the net value of supplies made through the e-commerce operator as non-acceptance of products will amount to returns. TCS will have to be paid by the E-Commerce operator on the basis of the aggregate value of the supplies of the underlying supplier per se.

Sales returns within a time period:

In case of sales returns within a time period, if supplies are made in a particular month and goods are returned on the same month, then no TCS shall be collected to the extent the goods are returned in the same month as TCS is required to be collected on the net value of taxable supplies made.

In another case if supplies are made in a particular month and goods are returned in another month, then TCS to the extent goods are returned is to be reduced from TCS collected on supplies made during the other month.

What are the TCS implications for the e-commerce operator in the case of Freebies, Buy 1 Get 1 Free and Discount?

Freebies:

In the case of freebies, supplies are made without consideration. When there is no consideration to be collected, then the question of TCS doesn’t arise as Section 52 clearly sets out that consideration has to be collected by the e-commerce operator in order to trigger TCS implications on the same. Freebies warrant attention from the supplier’s point of view only when the recipient is a related party, as the provisions of Schedule I will come into play only for transactions carried out without consideration. Therefore, there is no question of TCS liability for the e-commerce operator as there is no consideration collected (even if the valuation provisions are prescribed for such transactions).

Buy 1 Get 1 Free:

This practice is followed by many e-commerce operators. For E.g.:  1 plus 1 offers / 20% extra quantity offers on shampoos, hair oils etc. In this case, the cost of the 1 free unit / extra quantity of shampoo is generally included in the sale price of the 1 unit for which the customer is paying the price. Such schemes are introduced to give to the buyer an incentive to purchase more quantity at a lesser price indirectly by giving something free. Hence, offering extra units / quantity of the same product is in the nature of discounts. This discount or the value of free article/ extra quantity shall not be included in the value of supply. No GST is required to be paid on the extra unit / quantity of the product being offered under promotional schemes. Since no consideration is collected on the additional unit, there is no TCS implications on the additional unit.

Discounts:

In case of discounts given before or at the time of supply will be allowed as deduction from transaction value. Such discounts must be clearly mentioned on the invoice. Therefore, in this case, TCS shall be collected on the value arrived at after factoring discount.

Discounts given after supply will be allowed as deduction from transaction value only if-

• It is mentioned in the agreement entered into before sale AND
• input tax credit proportionate to the discount has been reversed by the recipient of the supply AND
• It can be clearly tracked to relevant tax invoice

Post supply discounts mostly usually take place in an e-commerce transaction in the form of cashbacks (discussed in detail in subsequent paragraph) or through vouchers that can be used on subsequent purchase.

Under this scheme, the customer is given a discount voucher that can be availed on the subsequent purchase of the goods or services. Example- a supplier offers a discount voucher of Rs. 500 on purchasing goods worth Rs. 2,000 but with the condition that the same can be used on the subsequent purchases only. On the first supply, the question of reducing the discount of Rs. 500 should not arise and the taxable value shall be Rs. 2,000. Thus, in this case TCS shall be collected on Rs.2000.

As per Section 15, any discounts given after the supply has been effected shall be reduced from the taxable value only where such discount can be traced with respect to specific invoices issued in the past and such discount is established according to the terms of a contract. In our example, if the discount can be linked to the earlier invoice, a credit note can be issued and hence Rs. 500 can be reduced from the taxable value on the second visit. Therefore, TCS is to be collected on the net value after taking into account the value of the discount voucher.

What are the TCS implications for e-commerce operator in the case of cashbacks through Wallets/Payback Points?

E-Commerce operators offer various cashbacks/paybacks points to customers on the purchase of products that are available on their website. These cashback coupons/payback points are not provided by the supplier and the expenditure in this regard is borne by the E-Commerce operator to increase the customer base on their website. In this case, the

customer is required to pay the entire price of the product and only subsequent to the purchase, the cashback amount/payback points are credited in his wallet. Since this type of cashback is also discount offered at the time of sale which cannot be recorded on the invoice issued by the supplier (as the supplier has nothing to do with the cashback), such cashback shall not have the effect of reducing the GST liability.

For the type of above methodology, wherever it tantamount to the E-Commerce operator collecting the consideration even by offsetting the voucher that has been issued by him in terms of the voucher that has been issue by the E-Commerce operator, the TCS collection will have to be retained by the operator and the same will eventually be credited in the electronic credit ledger of the underlying supplier.

Caution needs to be exercise as to what kind of Pre-paid Instruments are used as part of the transaction to understand if the very gesture of the PPI would be exigible to GST or otherwise. 

What are tax implications of B2C Cross border purchases and the OECD Suggestions for taxing jurisdictions on the same?

This is usually seen in the case of Web-Content Platforms. In the OECD Report on “The Role of Digital Platform in the collection of VAT/GST on Online Sales”, it suggests making the digital platforms (e-commerce operators) register in the taxing jurisdiction (where the customer is located) in case of cross-border B2C transactions and pay full GST liability on the same, which is a form of reverse charge mechanism.

In India, if a cross-border supplier, supplies through an e-commerce operator then he shall have to compulsorily obtain registration in India.

Let us now discuss about taxability of B2C cross-border supplies made by online sellers. In case of an online seller making cross border supplies other than OIDAR services, no GST will have to be paid since the customer is a non-taxable online recipient and the import of services by a non-taxable online recipient is exempt as per Notification No 09/2017- Integrated Tax (Rate), dt 28-06-2017. Therefore, no registration will have to be obtained by the online seller in the case of supplies other than OIDAR services.

In case of an online seller, who supplies cross border OIDAR Services to a non-taxable online recipient, it will be taxable, and the online seller will have to take registration under GST in India. The approach recommended in the OECD report for mandating e-commerce operators to register in the taxing jurisdiction has been adopted with respect to only the OIDAR services, supplied by online sellers.

What are tax implications of B2B Cross border purchases and the OECD Suggestions for taxing jurisdictions on the same?

The OECD Report on “The Role of Digital Platform in the collection of VAT/GST on Online Sales” suggests that any imports by business entities (recipient) through e-commerce operators in the taxing jurisdictions shall be liable for payment of GST by the business entities under reverse charge mechanism. The e-commerce operator does not have any role to play i.e., either to collect GST or TCS. Similar principles of taxing the imports by business entities has also been adopted in India.

As discussed in B2C cross border purchases, if a cross border suppliers make supply through an e-commerce operator registered in India, then they will have to necessarily register in India.

In the case an online seller located outside India, supplies to a registered recipient in India, the GST shall be paid by the registered recipient under the reverse charge basis and in which case, there is no requirement for the online seller to register in India and collect GST.

What are the reconciliation aspects to be followed by an e-commerce operator?

E-commerce operators have to file GSTR-8 by 10th of the next month in which the tax was collected. The TCS details submitted by the operators in GSTR 8 will be available to all the suppliers in GSTR 2A. The supplies will be available in GSTR 2A after the due date of filing GSTR-8. The tax collected will be reflected in the electronic cash ledger of the respective suppliers. The suppliers can claim the credit accordingly after matching and reconciling their supplies with the details in GSTR 2A.

Further, the E-commerce operator would be required to perform following reconciliations:

• Total consideration received during the month vs. Value on which TCS has been collected.
• Party-wise reconciliation of TCS (upon any discrepancies reported by the supplier).

WAY FORWARD

We would be delighted to have a larger and more comprehensive on the E-com Ecosystem with you if you are interested. For Coffee and Conversations please do revert to us at [email protected]