GST: Representation on implementation of ecommerce parity issue for online sellers

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GST: Representation on implementation of ecommerce parity issue for online sellers

Tejasvi

@tejasvi

November 28, 2022

Public Policy

215

The GST Council, in its 47^th GST Council meeting held in June 2022, decided to extend the GST registration threshold of INR 40 lakhs for online supplier of goods under S. 24(ix) of Central Goods and Service Tax Act, 2017 (CGST Act). As per the Press release dated June 29, 2022 issued by Press Information Bureau (PIB), the above decision will be implemented w.e.f January 01, 2023 subject to preparedness by GST common portal and Electronic Commerce Operators (ECO).

During our last interaction with GSTN team, it was discussed that the APIs will be released by GSTN team by end of October or latest by early November. However, there has been no formal update to the industry, specifically on the following aspects:

Effective date of implementation: The implementation date of the above decision is yet to be announced. As per the press release issued by Central Board of Indirect Taxes and Customs (CBIC), the decision is likely to be implemented effective January 01, 2023.
Date of release of API for testing: The date of release of API in sandbox environment for testing is yet to be announced/ notified to the industry.
Manual/ Frequently Asked Questions (FAQs) - A detailed manual/ FAQ/ clarification on the process (including the one’s highlighted below) is yet to be released/ notified:

Process of on-boarding unregistered online sellers to GST portal; and
Proposed amendments in GST monthly return (i.e. GSTR-8) for small sellers (i.e., online sellers).

In this regard, we have made a submission to GST officials requesting them to:

Issue a formal notification specifying the date for implementation of the decision made at the 47^th GST Council meeting regarding the extension of GST registration threshold limit of INR 40 lacs for online suppliers of goods. As previously stated, since the industry is still waiting for detailed process manual/FAQ and release of API for testing, we believe the implementation date should be no earlier than April 1, 2023. It is expected that ECOs would onboard millions of small sellers and getting them registered on the GST portal for enrolment number would take a significant amount of time (at least 6 months). Furthermore, all unregistered online sellers must be trained to comprehend the new requirements under the GST law and thus would require significant time as the number of sellers is high.
Release the APIs for testing on sandbox environment by November 30, 2022. Parity for small sellers is a business reform and not just a tax law change. This will require changes to be made to ERP systems of the ECOs and other allied business processes. Given this, we propose that API should be released by November 30, 2022 for testing them in the sandbox environment. This will help ECO to prepare themselves as well as unregistered online sellers.
In addition to the above, we also request for issuance of FAQ/ manual on the proposed changes to be made on GST common portal with regard to implementation of decision taken in 47th GST Council meeting to extend GST registration threshold for online supplier of goods.

We hope you will find the update useful.

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Tejasvi