GST: Submission highlighting key GST issues faced by e-commerce industry

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GST: Submission highlighting key GST issues faced by e-commerce industry

Tejasvi

@tejasvi

April 29, 2021

Public Policy

401

E-commerce sector is on a growth trajectory and has a cascading effect on all sectors of the economy with the potential to reshape the Indian economy as we move forward into the next decade.

Tax compliance is an important aspect for realising the full economic benefits of any Industry. For e-commerce, determination of place of supply has been a point of deliberation. In this context, the GST Council Secretariat, on December 18, 2020 vide reference number F.No.25/Committees-1/GST Council-Pt-1/5057/18-12-2020, constituted a committee of officers to suggest measures for monitoring of business run through online platform for tax compliance (Committee). The terms of reference of the committee cover:

Compliance and disclosure made by the e-commerce suppliers of goods and services with regard to tax revenue that accrues to consumption state;
Plan of action to improve compliance as well to avoid interstate disputes; and
Any other related matter to ensure law is complied fully by e-commerce suppliers.

With regard to tax revenues that accrue to the consumption state, it is important to note that the compliances undertaken and disclosures made by e-commerce suppliers of goods and services, are already in place as the e-commerce industry has a robust mechanism that allows the tax type being paid/disclosed correctly. This is also supported by the fact that Tax Collection at Source (TCS) returns filed, and e-waybills generated by e-commerce participants (the marketplace, transporters and sellers) adds a reconciliation point for discharge of taxes to the correct consuming states.

In addition, the ethos of e-commerce marketplaces is to ensure timely and correct delivery of supplies to the intended recipient which is dependent solely on the address of delivery. Accordingly, the place of supply determination on the invoice is absolutely robust and specifically, the PIN code of delivery is used to populate the State of consumption while generating invoice for supply and at the time of filing TCS return in Form GSTR-8.

As the Committee has been set up to resolve issues relating to e-commerce industry, we have made a submission to GST officials requesting them to consider the issues which are hampering day-to-day operations and impacting compliance processes of e-commerce industry. These changes will address disparity and will simply compliances by embracing the e-commerce model. In short, the positive impact of these on revenue reporting & augmentation is significant and we request that these be kindly addressed.

Our submission to GST officials highlighting key GST issues faced by e-commerce industry is attached for your reference.

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Tejasvi