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E-Commerce Operator under GST

20325 e commerce

The growth of electronic commerce in India has also resulted in conception of online marketplaces. A marketplace is an e-commerce platform owned by the e-commerce operator like Flipkart, Snapdeal and Amazon. Government has also allowed Foreign Direct Investments under such model to boost e-commerce marketplace business model in India.

What is E-Commerce Operator under GST?
Section 43B(e) of the GST Act states that an electronic commerce operator is everyone who, directly or indirectly, owns, operates or manages an electronic platform which is engaged in facilitating the supply of any goods and/or services. Additionally, a person providing any information or any other services incidental to or in reference to such supply of goods and services through electronic platform would be considered as an Operator.

As per Section-24 of GST Act, every e-commerce operator is compulsory required to get themselves registered irrespective of their turnover. In in e-commerce operation business there are three parties involved in a transaction:

  • Seller: A person who sells his product through E-commerce operator indirectly to buyer.
  • Buyer: A person who buys the product through E-commerce operator indirectly from Seller.
  • E-commerce operator: An operator who operates as a mediocre between the seller and buyer. E-commerce operator provides a place to a seller where he can sell his products and place to a buyer where he can buy the product.

Since e-commerce operator is providing the services to the seller as he is providing platform to him to sell his products he will charge for the said service from seller in form of commission. As per GST Act, GST will be attracted on such service also Seller will charge GST on product as well on the product sold to the Buyer. Therefore, there are two transaction takes places in one supply.

Returns forms under GST for e-commerce sellers:

  • GSTR-1: Outward sales by sellers.
  • GSTR-3: GST monthly return with monthly payment of tax.
  • GSTR-8: GST return for e-commerce operator.
  • GST-9: GST annual return.
  • Section-52: Tax collection at source.

Every electronic commerce operator, not being an agent, shall collect TCS at such rate not exceeding 1% 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.

Net taxable values here means aggregate value of taxable supplies of goods & services made during any month by all registered taxable persons through the operator reduced by the aggregate value of taxable supplies returned to the suppliers during the said month. TCS by electronic commerce operator shall be on billing basis and not on collection basis.

TCS provisions aren’t applicable where GST is payable under reverse charge. TCS provisions do not apply in case of exempt supply. Payment of TCS can only be made through cash Ledger not by the credit ledger.
E-commerce operators have to register themselves in every state where their suppliers are located for and foreign companies can appoint an ‘agent’ on their behalf for securing such registration.

It said that e-commerce operators will have to obtain separate registration for TCS regardless of whether they are already registered under GST as a supplier or otherwise and have GSTIN. The amount collected by the operator is to be paid to the government within 10 days from the end of the month in which the said amount was collected.

In GST regime, compliances are increased for e-commerce operator. Apart from monthly returns of GSTR-1 & 3B and additional return of GSTR-8 is required for e-commerce operator. Also, e-commerce operator are required to get themselves registered in every state in which they operate. The concept of centralized registration can no longer save them.

Here at AJSH, we assist our clients in getting updated information about the recent changes, in filing of GST returns for e-commerce operators, GST assessments and GST audits. If you have any questions or would like to know more about GST, kindly contact us.


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