Goods and Services Tax (GST) is a comprehensive tax levied on the supply of goods and services within India. E-commerce sellers are required to comply with the GST laws and regulations, just like any other business.
All e-commerce sellers, regardless of their annual turnover, are required to register under GST. This is because the GST law does not provide any exemption for e-commerce sellers.
E-commerce sellers are also required to comply with the GST laws and regulations.
On 1st Oct 2023 onward ( 48th GST Council Meeting ) GST Council has decision that would benefit small enterprises sell their products online on E- commerce platforms not required to register under GST (as they have turnover below the threshold limit) with a condition that the sell only within the same state where the seller belongs. If they sell products outside state then they have mandatory to register GST
The GST rate applicable to e-commerce sales depends on the type of goods or services sold. The following table shows the different GST rates for different types of goods and services:
| Type of goods or services | GST rate |
|---|---|
|
Food items |
0% |
|
Essential items |
5% |
|
Most non-essential goods |
18% |
|
Luxury goods |
28% |
In addition to the GST rate, e-commerce sellers are also required to collect tax at source (TCS)
For Example
| Product or service | GST rate |
|---|---|
|
Apparel |
5% |
|
Electronics |
18% |
|
Furniture |
18% |
|
Books |
5% |
|
Food and beverages |
5% |
|
Cosmetics |
18% |
|
Medicines |
5% |
|
Services such as entertainment, online education and travel |
18% |
E-commerce operators, such as Amazon and Flipkart, are required to collect tax at source (TCS) at the rate of 1% from the sellers on the total value of taxable supplies made through their platform. The collected TCS amount should be deposited to the government and reported in the e-commerce operator’s GST returns.
To calculate GST on e-commerce sales, the seller must first determine the type of goods or services being sold and the applicable GST rate. Once the GST rate is known, the seller can calculate the GST amount by multiplying the GST rate with the total value of the sale.
Example :
An e-commerce seller sells a mobile phone worth Rs. 10,000. The applicable GST rate on mobile phones is 18%. The seller will have to charge GST of Rs. 1,800 (18% of Rs. 10,000) on the sale.
Here are some tips for e-commerce sellers to comply with the GST laws and regulations:
- Obtain GST registration and get a GST Identification Number (GSTIN).
- Charge the correct GST rate on the products or services sold.
- Collect TCS from the buyers at the rate of 1% on the value of supplies.
- File GST returns regularly and deposit the collected GST and TCS with the government.
- Keep proper records of all GST-related transactions.
If you are an e-commerce seller, it is important to be aware of the GST laws and regulations that apply to you. By following the tips above, you can ensure that you are in compliance with the law and avoid any penalties or fines.
- Make sure to register under GST and obtain a GSTIN.
- Charge GST on all sales at the applicable rate.
- Pay GST to the government on time.
- Claim input tax credit on the GST paid on your purchases.
- Keep proper records of your sales and purchases.
- Consult with a tax professional if you have any questions.
E-commerce sellers are required to comply with the GST laws and regulations. This includes registering under GST, charging GST on sales, and paying GST to the government. E-commerce sellers can also claim input tax credit on the GST paid on their purchases.
By following these tips, e-commerce sellers can ensure that they are complying with the GST laws and regulations.
If you have any questions or need assistance with GST compliance, you should consult with a tax Expert.
- Government of India GST website: https://www.gst.gov.in/
- GST Council website: https://www.gstcouncil.gov.in/
- GST helpline: 1800 425 6666
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