For an e-commerce seller, how does GST affect e-commerce business and e-commerce sellers

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Dear Friends,

Who is the e-commerce operator

CGST act defines electronic commerce as – ” Electronic Commerce means the supply of goods or services or both, including digital products over a digital or electronic network.” And defines electronic commerce operator as – “Electronic Commerce Operator means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce”. As per the above definition a person who is providing a platform for others to sell goods or services is considered an e-commerce operator. The main examples of such operators selling goods are Amazon, Flipkart, Snapdeal and operators selling services are Uber, Ola, Swiggy, Urban Clap. 
A person selling goods or services through his personal website is NOT an e-commerce operator and therefore below provisions do not apply to them. He has to charge GST and file returns as a normal dealer. A businessman has registered on Justdial/Indiamart. A buyer calls such a seller and makes a purchase. This transaction is not done through Justdial/Indiamart and therefore cannot be considered as an e-commerce operator transaction. The difference in this model is that the transaction is not taking via the platform and also Justdial/Indiamart is charging the business for listing or premium listing and not charging a specific percentage of commission on sales.
Remote Office Space/Virtual Office Space in India

E-commerce operators GST registration requirement

E-commerce operators have to register regardless of the turnover. The threshold limit of Rs. 20 lakh/10 lakh is not applicable to e-commerce operators. They are not allowed to register under the composition scheme.

E-commerce sellers GST registration requirement

Persons who sell goods/services through an e-commerce operator are e-commerce sellers. They may be selling goods/services through one or more e-commerce operators and may also sell through their shops/offices along with such platforms. Such sellers can be classified into three categories for the purpose of the applicability of GST provisions. 
Selling goods:- Such sellers are required to get registered under GST even if there turnover is less than the threshold limit of Rs. 40/20/10 lakh. It means they are required to register before selling through the e-commerce platform. All platforms like Amazon, Flipkart, etc. required GSTIN at the time of registration as a seller on their platform. 
Selling services other than mentioned in Section 9(5):– Such sellers are required to register and collect GST only if their turnover is more than the threshold limit of 20/10 lakh. And if they are not registered then GST is not liable on such transaction is done through e-commerce operator. 
Selling services mentioned in Section 9(5):– Such sellers are not liable to register under GST even if their turnover is more than the threshold limit. A person who is selling goods/services through e-commerce operators cannot take registration under a composition scheme. He needs to get registered under the regular scheme only.

What is section 9(5) and services covered under section 9(5) of CGST Act

Section 9(5) states that the government may specify the categories of services on which e-commerce operator is liable to collect and pay GST as if e-commerce operator is providing the service. All the provisions will apply to such an e-commerce operator and not the persons selling services through him.
The categories of services specified by the government under this section:-
Services by way of transportation of passengers by a radio-taxi, motor cab, maxi cab and motorcycle for example – Ola, Uber. So, if a person is operating five cars through uber and has a turnover of Rs. 25 lakh then also he is not required to register. 
Services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, except where the person supplying such service through electronic commerce operator is liable for registration due to turnover beyond a threshold limit. For example – Goibibo, MakeMyTrip. Therefore if a hotel has a turnover of more than Rs. 20/10 lakh then section 9(5) is not applicable and the hotel itself is liable to get registered and pay GST. 
Services by way of housekeeping, such as plumbing, carpentering, except where the person supplying such service through electronic commerce operator is liable for registration due to turnover beyond the threshold limit.

Who is liable to collect and pay GST - Ecommerce operator or E-commerce sellers

Selling Goods:– The e-commerce seller is liable for the collection of GST and pays to the government. 
Selling services other than mentioned in Section 9(5):– The e-commerce seller is liable for the collection of GST and pay to the government. 
Selling services mentioned in Section 9(5):– The e-commerce operator is liable to collect and pay GST to the government.

How can e-commerce sellers take the benefit of remote office space also called virtual office space

All the e-commerce sellers are doing business at multiple locations or all over India/PAN India. Now as per GST rule it is compulsory/mandatory to take GST registration in a state, if there is the supply of goods and services in that state from another state, even to avail input tax credit, GST registration is required. Now, to take GST registration, it is mandatory to have a legal office address in that state. There are mostly all e-commerce sellers, who do not want/need to spend on buying or renting a high cost of physical office space. Ecommerce sellers look for a cost-effective solution to get GST registration for doing e-commerce online business and taking the benefit of the input tax credit in that particular state. In this situation, Remote office space/Virtual Office space for e-commerce online sellers makes it financially easy to take GST Registration all over India /PAN India. 

Note:- Remote workspace/Virtual office space location is always given at a physical office space. (For example co-working space).The cost of Remote workspace/Virtual office space starts at minimum Rs.1000/ per month. 

For more detailed information contact us 24/7 — +91 8882702020. INSTASPACES.

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