GST on Online Sellers of Amazon, Flipkart and Other Ecommerce

An online seller can sell its products on various e-commerce platforms like Amazon, Flipkart, Meesho etc. The online platform charges a commission from the seller as a certain percentage of the sale price. Let us discuss the GST registration, return filing requirements and invoicing rules for online sellers.

GST registration for online sellers

A person who sells goods on e-commerce platforms needs to get registered under GST and get a GST Identification Number (GSTIN). The basic exemption limit of Rs 40 lakh (for normal category states) and Rs 20 lakhs (for north eastern states) does not apply to online sellers. A person can register on online selling platforms only if registered under GST. Let us discuss the registration requirements in different scenarios:

1. A seller is already registered under GST: The seller can continue their registration. There is no need for any intimation/notice/change in registration. But, if a person is registered under the composition scheme, they must take registration under the normal scheme.
2. A person selling exempted goods: A person selling only exempted goods can get registered on online selling platforms without GSTIN. They are not required to take GST registration.
3. Business is in all states: The online sellers will be required to take GST registration in every state from where their supplies are made.
4. Place of supply is different from the office: The online seller will be required to take GST registration in the state where its place of supply is situated.

Place of supply rules to follow for online selling

GST is a destination-based tax system. Thus, goods and services are taxed where they are consumed and not at the place of origin. Place of supply is very important under GST as it determines the nature of the tax to be paid. 

• If the supply place and the supplier’s location are in the same state, Central Goods and Service Tax (CGST) and SGST (State Goods and Service Tax) is applicable.
• If the place of supply and the locations of the supplier is different: Integrated Goods and Service Tax (IGST) is applicable.

Invoicing rules for online sellers

One simple question which arises here is “Who pays GST? The seller or the e-commerce operator.” The answer to this is “the seller”. The e-commerce operator acts as a commission agent between the buyer and the seller. The seller sells the goods directly to the customer; they are liable to pay GST. 

Thus, the seller must issue a GST invoice to the buyer with GSTIN, address, product details, quantity, tax rate, tax payable, etc.

Big platforms like Amazon and Flipkart provide the sellers with a facility to generate invoices from their platform. The seller can just print the invoice and deliver the product to the customer along with the invoice.

GST return filing for online sellers

The return filing provisions under GST are the same for online and offline sellers. GSTR-1 and GSTR-3B should be filed monthly or quarterly, depending on your QRMP preference selection. 

Points to be noted:

1. In the case of quarterly returns, one must file Invoice Furnishing Facility (IFF).
2. GST returns must be filed from the month of registration itself, even if there are no transactions. NIL returns shall be filed to avoid penalty.

FAQs on GST on online e-commerce sellers

Is any special registration required to sell goods online through e-commerce platforms?

No, there is no requirement for a special registration under GST to sell goods online. If one is already registered, they can use the same GSTIN.

Who is required to deduct TCS on online sales?

An e-commerce platform like Amazon must deduct TCS at 1% from the total sale amount. This amount can be claimed as ITC by the online sellers. It will get reflected in the TCS statement of the seller. The seller must match the actual sales with this statement and accept the TCS.

What amount is credited to the bank account of the online sellers?

The e-commerce operator will pay the sale amount after deducting the commission,  packaging and delivery charges,  TCS, godown/ storage charges, or other additional charges.

Does the buyer have an option to add his GSTIN to the invoice?

Yes, some online platforms like Amazon gave an option to the buyer to add his GSTIN. This enables the buyer to claim Input Tax Credit (ITC) for such an invoice.