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GST: White Paper on place of supply tax position under GST for e-Commerce
GST: White Paper on place of supply tax position under GST for e-Commerce

April 19, 2021

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With the second largest consumer base in the world, Indian e-commerce accounted for 4.3% of the total retail market in FY 2019-20 and is estimated to grow at 3-4X the rate of traditional brick and mortar retail. Moreover, this segment has a cascading effect on all sectors of the economy, contributing 14% of total GST collections and 4.2% of total employment in FY 2019-20 in retail.

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. 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.

Information Technology has enabled robust systems for tracking and reporting supplies. In this regard, we have submitted a comprehensive White Paper to Chief Commissioner of State Tax, Gujarat Mr. J.P Gupta. The paper builds on the fact that place of supply can be easily identified for any given supply which takes place on the marketplace.

Accordingly, the paper presents specific recommendations focussing on procedural and system based improvements that would enable high quality visibility on Industry’s compliance status to the Government and strengthen informed and risk based enforcement. The paper also contains detailed review of the current practices being followed by various e-commerce companies in light of the provision related to determination of place of supply under GST.

The whitepaper is attached for your reference. In case of any feedback, write to tejasvi@nasscom.in 


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20210416_NASSCOM_Whitepaper_GST_PlaceofSupply_SectoralStudy.pdf

Tejasvi

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