Provisions under GSTE-COMMERCE

By:- Puneet Agrawal B. Com (H), CA, LLB

Partner Athena Law Associates

CONTENTS

• This presentation covers-Electronic commerceElectronic commerce operatorCollection of tax at sourceStatement of TCSRectification by supplierInformation from ECO

E-commerce

Seller

Government Balance to

vendor

Supply of goods

TCS to Govt.

Collection of proceeds (Rs.100)

Contd…• In the above illustration, There are two transactions, One, Buyer

places an order with the Seller of goods, to supply certain goods and another in which the electronic commerce operator facilitates such transaction. There is no clarity on taxability of the transaction of ‘facilitation of trade by e-commerce operators’. Any e-commerce transaction shall consist of two transactions of

sale‑purchase; and of facilitating of the sale‑purchase.

The second transaction of facilitation which is also for a consideration has not been dealt with under the law, leaving scope for huge litigation in future.

ELECTRONIC COMMERCE: Defined but nowhere used (Section 43B)

Electronic Commerce means [Section 43B(d)] :  supply or receipt of goods and /or services, or transmission of funds or data over an electronic network, by usage of any application of the internet but shall not be limited to e-mail, instant messaging, shopping carts, web services,

UDDI, FTP, EDI whether or not payment is conducted online whether or not the ultimate delivery of goods and services is done by the operator.

Athena Comments: Even though the term ‘electronic commerce’ is defined in Section 43B (d), yet it is not

used in this Chapter. However, the term “Electronic Commerce Operator” is being used in Section 43C which

talks about Collection of tax at source.

E-Commerce Operator: (Section 43B)

Electronic Commerce Operator includes: [Section 43B(e)] :

every person who, directly or indirectly, owns, operates or manages an electronic platform that is engaged in facilitating the supply of - any goods and/or services or in providing any information or any other services incidental to or In connection there with but shall not include persons engaged in supply of such goods and/or

services on their behalf.

Collection of tax at source (Section 43C)

• TCS Collection – Every “electronic commerce operator” [ECO] – shall collect – an amount at the rate notified by CG/SG on the recommendation of the Council– from the supplier – at the time of credit of any amount to the supplier or at the time of payment made to the

supplier whichever is earlier, – out of the amount payable or paid to the supplier, representing consideration towards the

supply of good and/or services.

• The amount paid to the Appropriate Govt. shall be considered as tax paid by the supplier and the supplier shall claim credit in his electronic cash ledger.

• Payment to Govt.– The amount has to be paid to the credit of the Appropriate Govt. by the operator within

10 days after the end of the month in which the amount has been collected.

Statement of TCS (Section 43C)

• Furnishing of Statement– An electronic statement has to be furnished by the operator of all amount

collected towards the outward supply of goods and/or services – within ten days after the end of the month in which the amount has been

collected.• Matching

– The amount collected under sub section (1) and furnished by the operator under sub section (4) will be matched with the outward supplies of the supplier in his valid return for the same month or any preceding calendar month.

– When the details of the outward supply on which tax has collected as declared by the operator do not match the details declared by the supplier then the same will be communicated to both persons.

Rectification by Supplier (Section 43C)

• Rectification by the Supplier– If the supplier does not rectify the discrepancy mentioned under Sub section

(7) in his valid return for the month in which the discrepancy arose it shall be added to the output liability for the calendar month succeeding the calendar month in which the discrepancy arose.

– The supplier is liable to pay tax on the liability under sub section (8) along with interest at the rate specified under sub section (1) of section 36 from the date such tax was due till the date of its payment.

• Athena Comments– There may be mismatch in Period of booking by Supplier and Period of Credit

by ECO– In all those cases, as per the provision automatic liability of the supplier

Information from ECO (Section 43C)

• Seeking information from the ECO– Any authority not below the rank of Joint commissioner may by notice require

the operator to furnish details of the supplies of goods and/or services effected through such operator during any period, or stock of goods held by the suppliers making supplies through such operators.

– The operator has to furnish details within five working days after a notice is served under Sub section (10).

– The penalty may extend to twenty five thousand on any person who fails to furnish details after a notice is served under Sub section (10).

THANK YOU

Contact us:Puneet Agrawal

PartnerAthena Law Associates

puneet@athenalawassociates.com+91-9891-898911

Website: athena.org.inBlog: gstlawindia.com