Understanding GST Regulations for E-commerce Platform Vendors

Vendors selling products through various e-commerce platforms such as Amazon, Flipkart, and Meesho need to understand specific Goods and Services Tax (GST) regulations. These online platforms typically levy a commission, calculated as a percentage of the sale price. This article details the GST registration obligations, return filing procedures, and invoicing guidelines applicable to online sellers.

GST Registration for Online Sellers

Individuals or entities engaged in selling goods via e-commerce platforms are mandated to obtain GST registration and acquire a GST Identification Number (GSTIN). The standard GST exemption thresholds of ₹40 lakh for general states and ₹20 lakh for North-Eastern states do not apply to online sellers. Registration with an online selling platform is contingent upon prior GST registration. Below are various registration scenarios:

• Existing GST Registrants: If a seller already possesses GST registration, they can proceed without needing to notify or modify their existing registration. However, sellers operating under the composition scheme must transition to the normal scheme to sell online.
• Suppliers of Exempted Goods: Entities exclusively selling exempted goods are permitted to register on e-commerce platforms without a GSTIN, as GST registration is not mandatory for them.
• Multi-State Operations: Online vendors are obligated to obtain GST registration in each state from which their supplies originate.
• Discrepant Supply and Office Locations: Should the primary place of business differ from the actual place of supply, the online seller must register for GST in the state where the supply occurs.

Place of Supply Rules for Online Selling

GST operates as a destination-based taxation system, meaning that goods and services are subject to tax at their point of consumption rather than their origin. The determination of the place of supply is crucial under GST, as it dictates the specific type of tax applicable.

• When both the supply location and the supplier's location are within the same state, both Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) are imposed.
• If the place of supply and the supplier's location are in different states, Integrated Goods and Services Tax (IGST) becomes applicable.

Invoicing Rules for Online Sellers

A common query concerns the party responsible for GST payment: the seller or the e-commerce platform. The responsibility lies with the seller, as the e-commerce operator functions merely as a commission agent facilitating transactions between the buyer and the seller. Since the seller directly supplies goods to the customer, they are accountable for remitting GST. Consequently, sellers are required to issue a GST-compliant invoice to the buyer, detailing their GSTIN, address, product specifics, quantity, applicable tax rates, and the total tax amount due. Major platforms such as Amazon and Flipkart offer integrated invoicing tools, allowing sellers to easily generate and print invoices for inclusion with customer deliveries.

GST Return Filing for Online Sellers

GST return filing regulations apply uniformly to both online and offline sellers. Forms GSTR-1 and GSTR-3B must be submitted either monthly or quarterly, based on the taxpayer's chosen Quarterly Return Monthly Payment (QRMP) scheme preference. Key considerations include:

• For those opting for quarterly returns, utilizing the Invoice Furnishing Facility (IFF) is mandatory.
• GST returns are required to be filed starting from the month of registration, irrespective of whether any transactions occurred. Filing NIL returns is necessary to prevent penalties in the absence of sales.