E-Commerce: Introduction, Insights, Issues · Broadly classified as (E-commerce Operators &...

E-Commerce:

Introduction,

Insights,

Issues

Rahul Kakkar, Advocate

Founder & Director

AKCONSIS LEGAL | AKCONSIS PVT. LTD.

© Rahul Kakkar, Advocate | [email protected] | www.akconsis.com | AKCONSIS Legal

IntroductionGST is a comprehensive, multi-stage, destination-based tax on value addition and it has very clear rules and regulationsfor specific segments which makes it more powerful and applicable, specifically in the field of E-commerce.

Like; Section 2 (43), (44), (45) of the Act provides the meaning of following - Electronic Cash Ledger, Electronic commerce,Electronic commerce operator. This shows the inclusion of E-commerce transactions in GST legislation.

Definition:Ecommerce, also known as electronic commerce or internet commerce, refers to the buying and selling of goods orservices using the internet and the transfer of money and data to execute these transactions.

Under GST, e-commerce has been identified as “Supply of goods and/or services including digital products over digital orelectronic network”.

An e-commerce operator is also defined to include every person, who directly or indirectly owns, operates or manages anelectronic platform that facilitates the supply of any goods/services.

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InsightsDifferent Models of Sale: 1. There are broadly two categories of operation of online business, first is direct which means where the seller produces the product and directly sells it in the market through e-medium, for this GST filling is plain and simple standard GST filling rules can be opted. Broadly classified as (B2B Ecom Models)

2. E-commerce platforms are second type of online business, as stated above operators serve as platform between buyer and seller and works on commission basis on each sale. This type of transactions attracts different type of GST implementation. Broadly classified as (E-commerce Operators & Vendors)

Further is divided into CC & C+L, which is namely Combined Commission & Commission + Logistics Cost.

JIT model is the most popular model, since the inception of E commerce in India. Wherein, the Goods from the Sellers Place.

This model of E Commerce is an obsolete model of E commerce transactions, which is now only used by only Indian E Com Operators.

FBM : Fulfilment Based Model

JIT : Just In Time Model

B2B : Model




IssuesNo threshold for GST registration:Government has specified a threshold limit for all the businesses.A business is liable to register for Goods and Services Tax once such threshold limit is breached.However, such limit is not applicable in case of E-Commerce Sellers*.

*e-commerce sellers need not register if total sales are less than Rs. 20 lakh Notification No. 65/2017 – Central Tax dated 15.11.2017

No Benefit under Composition Scheme: As per section 10 of CGST Act, 2017 all medium and small-scale business are allowed For Composition Scheme.

But S.10(2) clearly specify that e-commerce operators are kept out of its ambit. Also, as the E-Commerce Operators are liable to deduct TCS of the vendors & Composition Dealers aren’t eligible for any ITC of TCS or any other Inputs.

So, it can be concluded that no benefits can be fetched out of composition scheme for e-commerce operators. In simple words it can be noted that e-commerce business operators are ineligible for composition scheme.



http://www.cbec.gov.in/resources/htdocs-cbec/gst/notfctn-65-central-tax-english.pdf


Practical Issues of E-Commerce IndustryIn India




Business Issues % of Goods ReturnsPayments

ReconciliationsInverted

Duties/Refund

TCS IssuesGSTR - Issues

GST Regime Issues(Operators Focused)

Supply Chain

Payment ReconciliationGoods Returns

Delivery Assistance

GST Returns

Ordering Models

Credit Notes Ven

do

rsO

perato

rsSnapshot of Practical IssuesThere are broadly two categories of issues in operation of any online business, first are the practical issues linked with Vendor, which are broadly classified under this 6 headers, in relation to the Compliance & Business Process linked problems. Second, are the issues of the E Com Operators, which make these transactions & vendor relationship, one the most complex process to operate in.



E-Commerce: Introduction, Insights, Issues · Broadly classified as (E-commerce Operators &...

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