E-commerce means the supply of goods or services, or both, including digital items, through a digital or electronic network. (Described in Section 2(44) of the CGST Act, 2017)
E-Commerce Operator has been defined as any person that directly or indirectly owns, maintains, or manages a digital or electronic facility or platform for e-commerce (under Section 2(45) of the CGST Act, 2017)
E-commerce suppliers are currently required to take registration in GST laws irrespective of their turnover. They also cannot choose a composition scheme.
Present registration requirement to suppliers making supply through E-commerce Operators (ECO):
Sellers are divided into following categories based on GST applicability:
- Sellers that sell goods are required to get register with GST irrespective of turnover limit.
- Sellers that sell services are required to get register with GST as below :
- Other than those listed in section 9(5), may sell services without taking GST registration if value of sales do not surpass the mandatory turnover limit as per the GST law.
- Seller that dealing in services notified under section 9(5) are not liable to get registration even if their sales surpass the threshold level, sellers are exempt from GST registration.
Services for which Electronic commerce operator is liable to pay as if he is supplier of such services:
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. (Section 9(5))
Till now, following services are notified under section 9(5) of GST law for payment of tax
1. Passenger Transport Service-Services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle;
2. Accommodation Services : Services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes.
3. Housekeeping Services: Services by way of house-keeping, such as plumbing, carpentering etc,.
4. Restaurant Services (Cloud Kitchen) :- Supply of restaurant service other than the services supplied by restaurant, eating joints etc. located at specified premises. “Specified premises means premises providing hotel accommodation service having declared tariff of any unit of accommodation above seven thousand five hundred rupees per unit (Rs 7500/- per unit) per day or equivalent.”
In the 47th GST council meeting, very important recommendations came as explained below:
In-principal approval for relaxation in the provisions for suppliers making supplies through E-Commerce Operators (“ECOs”):
Council has eased intra-state supplies made through e-commerce portals and GST Registration exemption for online sellers with low turnover.
Now such suppliers will not have to obtain GST registration if their turnover is lower than Rs 40 lakh and Rs 20 lakh for goods and services, respectively.
Composition taxpayers would be allowed to make intra-State supply through e-commerce operators subject to certain conditions.
The details of the scheme will be worked out by the Law Committee of the Council. The scheme would be tentatively implemented with effect from 01.10.2023, subject to preparedness on the portal as well as by ECOs.
Above both the proposals would come into effect from January 1, 2023.
Note: The recommendations of the GST Council have been presented in simple language for information of all stakeholders. The same would be given effect through relevant Circulars/ Notifications/ Law amendments which alone shall have the force of law.
Disclaimer: This article is only a knowledge-sharing initiative and is based on the Relevant Provisions as applicable and as per the information existing at the time of the preparation. In no event, RMPS & Co. or the Author or any other persons be liable for any direct and indirect result from this Article or any inadvertent omission of the provisions, update, etc if any.
