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Everything about GST on Online Sellers of Amazon, Flipkart etc.

E-commerce platforms like amazon, filipkart, snapdeal has expanded with a great speed. These platforms allow other traders on sell on these platforms.

A trader is required to get registered under GST to be able to sell on these platforms. Here is a complete guide for persons who want to sell goods on any of these platforms.

GST rules are different for persons who provides services via platform like urbanclap or provide food via swiggy or cab service via uber/ola. This guide is only for persons who sell GOODS on amazon, flipkart, snapdeal, meesho, udaan, shopclues or other similar platform. Also a person who sells on his own website is not covered under this guide, general provision applies to such person.

Registration under GST

Every person who wants to sell goods on any of these platforms has to register under GST and get a GSTIN. Limit of Rs. 40/20/10 lakh do not apply on selling online. These platforms also do not allow to register without a GSTIN.

There is no special type of registration required for selling online. A person who already has GSTIN need not take another registration. There is also not any requirement for intimation/notice/change in registration.

But such person has to take registration under normal scheme. Composition scheme registered persons are not allowed to sell online.

While taking registration and reading anywhere about online selling keep in mind that persons selling through these website are NOT e-commerce operators. Amazon, flipkart etc are e-commerce operator and not the persons selling on them. So any rules relating to e-commerce operator doesn’t apply to you. Also, do not select e-commerce operator at time of filing registration form, otherwise you can get into major problems.

You can also take GST registration service of TaxAdda.

GST Returns

GST returns provisions for online sellers are same as that of offline sellers. At present, GSTR-3B is to be filed every month up to 20th of the next month. Also, GSTR-1 is to be filed for every quarter (April to June, July to Sep …….) by the end of next month. Persons whose turnover exceeds Rs. 1.5 crore are required to file GSTR-1 on monthly basis up to 11th of next month. A person whose turnover is less than Rs. 1.5 crore can opt voluntarily for monthly filing of GSTR-1 and once opted, it cannot be changed for that year.

An important point to note here is that GST returns are to be filed from the registration month even if there is no transactions at all. In other words, NIL return are also required to be filed, otherwise penalty is payable.

New GST return system is going to be applied from 1st April 2020. The online sellers will be required to file Normal return (GST RET-01) in the new system. Normal return has to be filed quarterly if turnover is up to Rs. 5 crore otherwise monthly filing is required.

TaxAdda specializes in providing GST return services to online sellers. Check our service page to know more about it.

Who has to pay GST?

One general questions each new seller ask is that who is liable to pay GST? Amazon or the seller who is selling on it. The answer is that the seller is liable to pay GST on sales made.

The concept is that the seller is selling directly to the buyer. Amazon is only like a commission agent in between. So the seller is liable to pay GST and not amazon.

GST calculation method is given later in this article.

Commission and its input

The online platform charges a percentage of the sale price as commission from the seller. The percentage depend on the platform and also on the category of goods.

The platform has to charge GST @ 18% on such commission and the seller can take input tax credit of such GST.

Platform may also issue credit notes for the commission or other charges. GST on such credit note is to be deducted from the invoice’s GST to arrive at the input tax credit that can be claimed.

Platform also issues invoices for delivery charges, advertisement charges and other charges. Input credit can be claimed for all such expenses.

Invoicing to Customer

As discussed above, seller is selling the product directly to customer. Therefore, the seller has to issue GST invoice to customer with details like Customer name, address, product details, quantity price, GST amount etc.

Although customer has to issue invoice directly to client, almost all big platforms give facility to generate invoice from their platform. The seller is just required to print the invoice and send it with the product.

TCS and How to claim it

Amazon, flipkart is required to deduct TCS at rate of 1% of total sale price from the amount payable to you. This TCS can be claimed as input tax credit by online sellers. Such TCS is shown in the TCS statement, it is required to match the sales shown in this statement with actual sales and accept the TCS. Then the TCS amount gets added to the cash ledger of the person.

Can I sell on Amazon, Flipkart without GST?

You can sell online without GST only if you sell goods which are exempted. If you sell goods on which GST is applicable, then you has to get GST number to be able to sell online. You has to take GSTIN even if turnover is less than Rs. 20 lakh.

Do I need to take any special registration to sell online?

No, there is no special registration to sell online. If you are already registered, then you can provide that same GSTIN in amazon, flipkart etc.

Does the buyer has option to add his GSTIN in invoices?

Amazon and PayTm gives option to buyer to add his GSTIN. But Flipkart doesn’t give such option. GSTIN is compulsorily required to be mentioned in invoices to enable buyers to take input tax credit of GST.

What amount the online seller gets in his bank account?

The amount payable by e-commerce operator is equal to sales amount less commission less packing and delivery charges less TCS less ad charges (if any) less godown storage charges (if any).

How to calculate the GST payable?

GST payable is equal to GST on sale of goods less all input tax credit available. The common input tax credit available is GST paid on purchase of goods, on commission invoices, on advert invoices, on delivery invoices etc. Examples are provided in the our Guide to GST for Online Sellers.

About Prateek Agarwal

Prateek Agarwal is a Practicing Chartered Accountant from Jaipur and been in practice for more than 7 years. He writes mainly about GST and Finance.