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What is the impact of GST on e-commerce?

Posted by entersliceindia on October 4th, 2018

The e-commerce businesses are wide spread across the globe and are clearly overpowering the physical retail businesses with the digital distribution. But it has always been the goal to capitalize their e-commerce industry and apparently is quite successful in that.

When we talk about the e-commerce industry, what really comes to our mind is the global audience. An audience which is in control and getting their goods and services delivered to them conveniently at their doorstep. The keen e-commerce industryhas been observant of the consumer activity, tracking their behaviours via cookies on the websites to induce more relevant search results and attracting their attention. On top of that, they launch several schemes and discounts in order to continue with their expansion of horizon. Many smartphone users and digital device users not just with the speedy Wi-Fi connections but also through the 4G technology have boosted their operation which in turn boost the e-commerce industries via minimizing the gaps between the known popular brands and the mass population in demographics. The targeted population here is of the most active class of people, the youth. This goes on with reaching the semi-urban areas, where the physical outlets of the big brands are less and commerce shopping comes handy in these regions then. But the question here arise, is how the newly implemented GST law has affected or impacted the e-commerce empire?

What are the operators of E-commerce Under the GST Law?

Before the introduction of the GST law, there were separate taxes like VAT and CST etc which were to be paid by the sellers themselves to their respective state orcentral government. The e-commerce collects tax at the rate of just 1% it breaks as (0.5% of central GST + 0.5% of state GST), this is the net value of all the supplies that are taxable and the amount of tax collected from is called the TCS which is a short abbreviation of tax collecting at source. This TCS is applied over the collection of 1 month that is to be paid to the government.  The amount of TCS can be seen under the GST registered supplier’s GSTR-2 on whose behalf the TCS is collected.

All of the e-commerce operating sellers are supposed to submit a statement online with regard to the details of all the products that are sold by the respective sellers to the GST registration portal and the TCS via the form number GSTR-8. These submitted details by the respective sellers will be verified or matched with the seller’s furnished details in their form. In case both of the details are not matching, the seller and the e-commerce sales operating seller and the supplier are sent a notice mentioning the fact and to correct it.

The impact of GST on e-commerce industry sellers in the marketplace

-          GST implementation has increased the scope for the sellers by eliminating the  cascading effect of multiple taxes.

-          Because the GST taxation rates are same across the nation, the sellers no longer have to deal with the different taxes of the different states providing them with some degree of ease.

-          The sales that are executed on the inter-state level have now become a lot easier because the sellers no longer have to keep and maintain warehouses reducing their rental payments over inventories which in turn reduce the product prices.

-          The not so convenient impact of GST on e-commerce involves the matching of submitted forms by the suppliers and the sellers. If these don’t match though, both the parties get notices regarding the mismatch increasing the complexity of their business.

-          The sellers participating in the business through e-commerce are not eligible for the composition scheme.

-          These e-commerce sellers are supposed to be mandatorily having a GST registration and this shall be irrespective of their annual turnover.

-          No separate GST registrations are required for its sales in multiple states via e-commerce operators.

If you want to know more about the GST Registration and its impact on the e-commerce then you may anytime contact Enterslice where we are 24/7 hr available to help you with perfect solutions whenever you need to get in touch with us.

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Also See: E Commerce, Commerce Industry, Gst Registration, Gst Law, Sellers, Gst, Commerce

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