GST registration: Businesses and individuals who offer products or services online through marketplaces like Amazon, Flipkart, and eBay. These online markets serve as a stage for interacting with clients over the huge internet this E-Commerce sellers must need to know about GST Registration.
The Indian government introduced unique GST legislation for e-commerce enterprises as a result of the rapidly developing online retail industry. E-commerce vendors in India must do GST registration and abide by the GST legislation’s rules and stay within its prescriptive parameters in order to be in compliance with the law. All users will experience a fair and open digital market thanks to these rules.
Requirements of GST Registration for E-Commerce Sellers
Sellers Selling Goods:
- Regardless of whether their revenue is below the threshold limit specified by the government, e-commerce sellers dealing with physical products through platforms like Amazon, Flipkart, etc., are required to register with the CBIC.
- Unregistered sellers without GST Identification Number (GSTIN) cannot use these platforms for online selling as of now.
Sellers Selling Services:
- If an e-commerce supplier’s annual revenue is more than Rupees 20 lakh, it must register under GST.
- This section focuses on certain categories of services for which the tax is levied and paid by the e-commerce operator if the services were rendered through them. This includes-
- Passenger transport services
- Housekeeping services
- Restaurant services (includes cloud kitchens)
- Accommodation services
Irrespective of whether the supplier is registered under GST, the e-commerce operators will be liable to pay tax as if it were the supplier per the reverse charge mechanism. The supplies under this section will be mainly intra-state supplies.
GST Registration for E-Commerce Sellers: A Step-by-Step Process
- Go to the GST website: Start the registration process by going to www.gst.gov.in, the official GST portal.
- Select Services. Locate and click the Services tab on the home page, then choose Registration from the list of alternatives.
- Fill up the necessary information: Include all relevant details, such as your PAN, email address, mobile number, and the nature of your firm.
- The necessary documents online: E-commerce merchants are required to provide supporting documentation for their applications. PAN cards, Aadhaar cards, bank statements, and proofs of address are some examples of these documents.
- Application submission: Once all the information and supporting documentation have been given, submit the registration application.
- Application verification: To check for accuracy and compliance, the GST authorities will examine the application and any accompanying materials. If more information or documentation is required throughout the verification process, they may ask for it.
- Getting the GST registration certificate: The e-commerce vendor will get the GST registration certificate following a successful verification. The seller’s GST registration is formally acknowledged by this certificate, enabling them to operate their business under the GST framework.
TCS and TDS’s Applicability to E-Commerce Sellers
Tax Collected at Source (TCS):
- E-commerce providers like Amazon and Flipkart charge 1% TCS on the cost of the goods that e-commerce sellers sell during payment transactions.
- The government then receives the TCS amount that the e-commerce companies have paid out. In essence, the operators aid the government in obtaining payment from sellers for this tax.
- E-commerce vendors receive their cash following the TCS reduction after generating sales on these platforms. To offset their overall tax obligation, they can claim the TCS amount as a credit when completing their GST filings.
Tax Deducted at Source (TDS):
- E-commerce operators also apply TDS, whereby they take 1% of an e-commerce seller’s gross sales during credit or payment, whichever occurs first.
- The e-commerce operator is not required to collect TDS from a seller’s payment if their cumulative gross sales for the preceding year did not exceed Rs. 5 lakh. The sellers in these situations are paid in full.
- E-commerce vendors must give the operator their PAN or Aadhaar number in order to take advantage of this perk. The operator can then find qualifying sellers who are not subject to TDS deduction.
E-commerce sellers in India must register for GST in order to operate lawfully and in compliance with tax laws. The sequence process involves going to the GST site, entering the appropriate information, and submitting the necessary paperwork for verification. E-commerce vendors must comprehend eligibility requirements, TCS, and TDS on GST to avoid fines.
For more information on GST registration for e-commerce entities in India, connect with our team Babatax.