GST Registration
Goods and Service Tax

GST Registration for E-commerce Operators under GST Regime

calendar04 Jul, 2020
timeReading Time: 4 Minutes
GST registration for e-commerce

The methods of GST Registration for e-commerce operators, along with the forms needed by taxpayers who will deduct or collect TDS/TCS, are the parts of this write-up. The impact of GST on e-commerce has been a major one in India. The Indian government has introduced special provisions and regulations for e-commerce companies to make them act in accordance with under GST regime.

Indian e-commerce is flourishing with each passing day, and it is all set to rise 6 to 10 times in the forthcoming years. Two crucial factors contributing to the positive outcomes for e-commerce businesses are increasing disposable incomes and the convenience factor linked with online shopping. The government has provided special provisions to reduce the complexity associated with this aspect, and as a result, GST registration for e-commerce would be a more straightforward process.

  • Definition of E-CommerceU/S. 2(44) of the CGST Act, 2017, e-commerce refers to the supply of either goods or services or both comprising digital products on the digital or electronic platform.
  • Definition of E-Commerce OperatorU/S. 2(45) of the CGST Act, 2017[1], e-commerce operator refers to any individual responsible for owning, managing, or operating electronic/digital facility or platform for e-commerce either directly or indirectly.

GST Registration for E-Commerce

Obtaining GST registration for e-commerce is mandatory for most of the e-commerce operators. All those members who are undertaking supplies via e-commerce websites must obtain GST registration irrespective of the value of supply that they have made. Regardless of the website ownership as well as goods supplied, the entity needs to apply for GST registration for e-commerce.

Under Services Notified u/s 9(5) of the CGST Act, 2017, the e-commerce operator would have to pay tax on behalf of the suppliers.

Read our article:Synopsis of the Entire Mechanism of Advance Ruling under GST

Latest Updates Concerning GST Registration for E-Commerce Operators and TCS-Related Updates

  • GST registration is mandatory nowadays only for those e-commerce operators who are liable for accumulating tax at source.
  • TDS and TCS provisions under GST became applicable from October 1, 2018.
  • For inter-state supplies, Rate of TCS got notified as 1% of net taxable supplies, i.e., 1% of IGST.
  • For intra-state supplies, the Rate of TCS got notified as 1% of net taxable supplies. It comprises 0.5% of SGST and 0.5% of CGST.
  • According to the GST law, e-commerce operators don’t have permission to get TCS registration in some of the states and union territories where they are not physically present. Few taxpayers started considering this as a challenge.
  • In the wake of overcoming this challenge, from April 1, 2020, e-commerce operators without being physically present in any specific UT or state have got the permission to apply for TCS registration on the basis of their address of the premises or registered head office.

Which are the Entities Required to Deduct TDS under GST?

The following entities will deduct TDS under GST-

  • Local authorities
  • An establishment or department of the state or central government
  • Public sector undertakings as stated in one of the recent notification dated-September 13, 2018
  • Government agencies
  • The board or authority or other bodies set up by a state legislature or an Act of parliament
  • The society instituted by the state government or central government or other local authorities
  • The board or authority or any of the other bodies set up by state government or central government with 51% or active participation through control or equity

The TDS would get deducted at a 1% rate on the payments done to the suppliers of goods or services that are taxable, wherein the entire value of such supply within an individual contract, crossing the amount of Rs. 2, 50,000.

Who is Responsible for Collecting TCS under GST?

  • All the dealers or traders involved in selling goods or services on an online platform would receive the payment after a 1% tax got deducted.
  • Under the GST law, e-commerce aggregators are responsible for the collection, as well as the deposition of tax at a 1% rate from all the transactions.
  • All the dealers or traders involved in selling goods or services via an online platform must get registered under GST despite having their turnover below 20 lakhs in order to claim the tax deducted by aggregators.
Point to Consider- Services supplier who is not supplying via an e-commerce operator accountable to accumulate tax at source with a turnover below 20 lakhs got exempted from acquiring registration under goods and service tax. 

Process of GST Registration for E-Commerce Operators

Any e-commerce operator who needs to collect TCS or deduct TDS would submit an application electronically for registration, signed, or verified via EVC (Expanded as electronic verification code) with the help of the FORM GST REG-07 over the common portal, either in a direct way or from a Facilitation Centre reported by the Commissioner. Furthermore, the proper officer would confer registration after the completion of the verification process. After that, the proper officer will issue a certificate of registration using the FORM GST REG-06 in the time limit of three working days from the submission date of application.

Registration Cancellation Process      

If the GST officer will enquire or determine via a proceeding that a person is not needed anymore to collect TCS or deduct TDS, then the GST officer would go for cancelling the registration. The cancellation must get communicated to the said person in FORM GST REG-08 electronically. The same procedure would get followed for cancellation by the officer, as in the case of normal taxpayers.

The Final Words

Special provisions and regulations have been set up by the Indian government with respect to GST registration for e-commerce operators collecting TCS. At Corpbiz, we would assist you regarding the GST registration process and guide you on similar related matters.

Read our article:All you need to know about GST Refund on Exports

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