GST Compliance for e-Commerce Sellers

The e-commerce sector in India is thriving and growing immensely year over year. With a large amount of trade and commerce online, the Indian government has put in place special provisions that e-commerce sellers need to comply with under the Goods and Services Tax (GST) law. This article lays them out in detail.

Who is an e-Commerce Seller?

Persons who sell goods or services through an e-commerce portal or operator are called e-commerce sellers. These sellers may sell their goods or services through one or multiple e-commerce operators and could also be selling via their shops or offices together with the e-commerce platforms.

GST Registration Requirement for e-Commerce Sellers

The applicability of GST to e-commerce sellers varies depending on whether they supply goods or services.

• GST is applicable on a supplier of goods, and there’s no turnover threshold for exemption available for such sellers.
• For a supplier of services, GST is only applicable if their turnover exceeds Rs 20 lakh.
• Suppliers of services mentioned under section 9(5) of the CGST Act are exempt from GST. These include:
  • Passenger transportation providers through e-commerce operators like Uber, Ola, etc.
  • Hotel service providers through aggregator platforms like Yatra.com, etc., except where the service provider is liable for registration under Section 22(1) of the CGST Act
  • Providers of housekeeping services such as plumbing, carpentry, etc., through aggregator platforms such as Urban Company, etc., except where the supplier is liable for registration under Section 22(1) of the CGST Act.
  • Restaurant service providers other than the services provided by restaurants, eating joints, etc., that are located at specified premises. Specified premises offer hotel accommodation with a declared tariff value exceeding Rs.7,500 per unit per day or equivalent.

The above category for sellers to whom GST is applicable must register under GST as a registered seller. Also, such a person needs to register themself as a regular taxpayer. A person selling goods or services through an e-commerce operator cannot register under the composition scheme.

GST Returns to be Filed

Suppliers registered under the GST Act have the file the following returns:

GSTR 1 – GSTR-1 is a monthly return statement of outward supplies that needs to be furnished by the registered supplier of goods and services or both.

To simplify the process of filing GST returns for small businesses, the government launched the QRMP scheme. A registered e-commerce seller opting for the QRMP scheme can file Form GSTR-1 quarterly provided:

1)The business turnover of such a registered e-commerce seller was less than Rs.5 crore during its previous financial year.

2) In case the aggregate turnover of such registered e-commerce seller exceeds Rs.5 crore during any quarter in the ongoing financial year, such e-commerce seller won’t be eligible for this Scheme from the next quarter onwards.

The due date to file GSTR-1 monthly is the 11th of the succeeding month. The quarterly filing deadline is the 13th of the month succeeding the quarter. Quarterly filers have an option to furnish sales details in an Invoice Furnishing Facility (IFF) for the first two months of the quarter by the 13th of the succeeding month.

GSTR 3B – The GSTR-3B is a consolidated summary of inward and outward supplies which a registered e-commerce seller has to file monthly or quarterly depending on their annual turnover. If the e-commerce seller has opted for the QRMP scheme and its annual turnover is less than Rs.5 crore, it could be filled quarterly.

The last date to file the GSTR-3B is the 20^th of the following month viz. February 20^th, 2022, is the due date for January 2022 for the registered e-Commerce sellers with turnover exceeding Rs.5 crore.

The last date to file the GSTR-1 is the 22^nd/24^th (depending on the state or UT) of the next quarter, viz. for October 2021 to December 2021. The last date is 22^nd/24^th January 2022, for registered e-Commerce sellers with an annual turnover below Rs.5 crore.

GSTR 9 – GSTR 9 is an annual return that is required to be filed by an e-commerce seller if their annual turnover exceeds Rs.2 crore. The due date to file GSTR-9 for the current financial year is the 31st of December, following the relevant financial year. For instance, the due date to file GSTR-9 for FY 2021-22 is 31st December 2022.

GSTR 9C – Every registered e-commerce seller whose turnover during the financial year exceeds Rs.5 crore has to furnish a reconciliation statement in form GSTR-9C on a self-certification basis. 

The due date to furnish GSTR-9C is the same as GSTR-9. Hence, the GSTR-9C should be filed on or before 31^st December following the relevant financial year under audit.

Applicability of TCS to e-Commerce Sellers

e-Commerce operators like Amazon, Flipkart, Snapdeal, etc., are required to collect tax at source at 1% on the value of supplies made the e-commerce suppliers at the time of making payment to them. The e-commerce operator would levy the TCS and then pass it on to the government.

The e-commerce seller will receive payment after deduction of TCS at the rate of 1%, and such TCS has to be claimed as credit by the e-commerce seller while filing their GST returns.

Applicability of TDS to e-Commerce Sellers

e-Commerce operators are required to deduct tax at source at 1% on the gross sales amount of an e-commerce seller at the time of credit to its account or at the time of payment to such seller, whichever is earlier. The e-commerce operator isn’t required to deduct TDS if the e-commerce supplier’s gross amount of sale of goods or services, or both in the previous year, doesn’t exceed Rs.5 lakh.

Further, the e-commerce seller must furnish their PAN or Aadhaar to the e-commerce operator. If the e-commerce seller does not furnish his PAN or Aadhaar to the e-commerce operator, TDS would be deducted at 5%. No TDS will be deducted in case the e-commerce seller is a non-resident.