GST Compliances for Ebay Sellers

Mandatory Registration under GST for Ebay Sellers

Ebay is an e-commerce company registered outside India. It doesn’t have any place of business in India.

But Indian sellers can register themselves on this platform & can sell their products outside India & ship internationally. As Ebay sellers are located in India and are selling their product outside India, it will come under Inter-state supply of Goods (export) under GST.

Under GST if a person is making Interstate supply, he is mandatorily required to take registration under GST without any threshold limit.

GST Applicability on Sales

As the Ebay seller supplies outside India, it will be considered as Export of goods under GST. Further, the export of goods or services is considered as a zero-rated supply in GST. Zero rated means that the entire value chain of the supply is exempt from tax.

Consequently, GST will not be applicable on export of any kind of goods or services. The Indian Ebay Seller (exporter) has the following options to discharge the GST liability on their sales: –

•  to export under bond/Letter of Undertaking (LUT) without payment of tax on Sales (outward supplies) and claim refund of GST paid on purchase of goods and services (more details below) or
•  pay IGST by utilizing GST paid on inward supplies also know as ITC or Input Tax Credit or in cash at the time of export and claim full refund of IGST paid (using ITC or in cash) from ICEGATE.

GST on Purchase of Goods/Services

GST on Business Purchases

No special benefit is available to the Ebay Seller at the time of purchase of goods from the market. You are require to pay the whole GST to the suppliers at the time of making purchase. Once you export the goods, you are allowed to get refund of the GST paid to suppliers (more details below).

Note – No RCM in applicable on commission charges paid to Ebay. In some cases Ebay sellers are required to pay GST under Reverse Charge Mechanism (RCM) on import of services/goods. For example, GST on Subscription charges paid to Ebay are liable to GST under RCM. This GST liability is to be paid in cash and at the same time Ebay seller can claim the GST credit for the tax paid under RCM.

GST Return Compliance for Ebay Sellers

Reporting Sales Value (Outward Supply) under GSTR-1

Once you receive any order on Ebay, an invoice in INR is automatically get generated by Ebay which contains all the standard details. If you are using Ebay courier partner, the same invoice get forwarded to the selected courier for the convenience.

Once the item passed all the custom check, a Shipping bill will get generated which is one of the main source document to file invoice level details in GSTR-1.

In GSTR-1, we have to report all of our export sales in Table No. 6A. Following details are required to be entered in the table 6A from Shipping bill: –

• Invoice number
• Invoice date
• Port code (export port code which is generally the airport in case the goods are exported via Air courier)
• Shipping bill number
• Shipping bill date
• Export under LUT or with payment of IGST
• Rate of GST
• Taxable value

Calculation of GST Payable under RCM/GST Receivable in GSTR-3B 

GSTR-3B is the summary return showing net GST Payable/Receivable for relevant tax periods. All sales shown in GSTR-1 will auto imported in Table No. 3.1 under (b) i.e. Outward taxable supplies (zero rated ). Further if you have opted for export without payment of GST then the IGST column shows 0 as you do not need to pay any other. On the other hand, if you are exporting with payment of GST, then IGST value get auto imported on the basis of filed GSTR1.

Ebay seller are also required to pay GST under Reverse Charge Mechanism (RCM) on some payments made to Ebay like fixed subscription charges etc. As Ebay is registered outside India, it will be considered as import of services. In case of import of service GST is payable under RCM by the recipient, in cash only. In GSTR-3B, it will be reported in Table 3.1 under serial no. (d) i.e. Inward supplies (liable to reverse charge). Further Ebay seller can claim GST credit of the same in Table-4(A)2 i.e. Import of Services.

Note – No RCM is applicable on the commission charges paid to Ebay.

All GST paid on purchases will be auto imported and shown in Table No. 4(A)(5) All other ITC. It is based on the GST inputs shown in GSTR2B for the relevant month/quarter.

Once all the details get filed in the GSTR3B, the net summary will be generated. The final step is to pay required tax (if any) and filed the return with OTP/DSC.

Due dates to file GST Returns

An Ebay Seller with turnover more than Rs. 5 crore has to file GST Returns on monthly basis mandatorily. If turnover is up to Rs.5 crore in the previous financial year, you can opt for QRMP (Quarterly Return and Monthly Payment Scheme) and file return on quarterly basis. However, you can choose to file on monthly basis even if the turnover is less than Rs 5 crore.

If you opt for quarterly return then GSTR-1 and GSTR-3B, both will be filed on quarterly basis, otherwise both will be filed on monthly basis. However, in both the option payment of tax is required to be made on monthly basis. Due dates for payment & returns are as follows: –

If you missed the filing of GST return then late fees is applicable. Read our article on GSTR Late Fee to know more.

Note – Ebay Seller has also comply with E-invoicing Rules. E-Invoicing is applicable if turnover exceeds Rs.5 Crore. Exporters are required to create e-invoice for Export and B2B sales transactions.

Letter of Undertaking (LUT) under GST for Ebay Seller

For export of goods/services, you are not required to charge GST on your invoices, if you have filed a Letter of Undertaking (LUT). If you have not filed LUT then you have to charge GST, and thereafter you may apply for refund of such GST.

Note – If you are not paying GST on your purchases then this is the advisable route to export otherwise it is better not to opt for LUT and pay GST on export of goods and get refund from ICEGATE directyly via automatic route which does not require separate any application or return.

Letter of Undertaking is commonly known as LUT. The LUT is prescribed to be furnished in form GST RFD 11 under rule 96A, whereby the exporter declares that he/she would fulfill all the requirements prescribed under GST while exporting without making IGST payment which is as below: –

• to export the goods or services supplied without payment of integrated tax within three months from the date of issue of the invoice for export
• to pay the integrated tax, thereon in the event of failure to export the goods or services, along with an amount equal to eighteen percent interest per annum on the amount of tax not paid, from the date of invoice till the date of payment.

Filing LUT Form (GST RFD-11)

You can file it online on the GST portal once you logged into your account. An LUT is filed for a whole financial year (01st April to 31 March). You need to file LUT for each financial year separately. You are allowed to do export without payment of GST only once you file the LUT. So, for example, if you file LUT for running financial year (i.e. 24-25) on 09 Nov 24 then you are required to pay GST on all the export sales made during the period 01 Apr 24 to 08 Nov 24 and you are allowed to export without payment of GST for the period 09 Nov 24 to 31 Mar 25.

Note – Right now, GST portal provide the functionality to file the LUT for the current running year as well as for next financial year in advance. So, for example, on 09 Nov 24, you are allowed to file the LUT for FY 24-25 as well as for FY 25-26.

Details required to file LUT: –

• GST username and password as you are required to login into your account for filing LUT
• Details of two witness (name, occupation and complete address along with pincode)
• Copy of last year’s LUT (if any)

Other Practical Complications for Ebay Sellers

Reporting of Advance Orders in GST Returns

Advance received against future supply of goods are subjected to GST as the invoice get issued at the same time of receiving of the order by Ebay Seller.

Notification No. 66-2017, Central Tax on 15th November 2017 – As per this notification, all suppliers of goods who have not opted for composition scheme, have been exempted from the burden of paying GST on Advances received. For such suppliers, time of supply would arise only at the time of issue of invoice and they need to discharge GST liability accordingly. However, the supplier of services are required to pay GST at the time of receipt of advance. Also, as per Section 20(iii) of the IGST Act, 2017, the provision of CGST related to time and value of supply shall apply to IGST as well.

So, it is presumed that advance against export of Goods, are required to be reported in the GST even the actual supply is not made as the invoice get issued at the same time of receiving the order.

Note – It further complicated the filing of GST Return as you are require to report the advance orders in the GSTR-1 for which no shipping bill is available. So, once the shipping bill is available, you need to amend the export invoices reported earlier (without shipping bills) at the time of filing subsequent GSTR-1 to add the details of shipping bills to claim refund of GST.

How to Report Orders in GST Return which are Directly Fulfilled from Outside India

As Ebay Sellers receive all the orders from customers outside India, sometimes Ebay Sellers arrange delivery of orders from outside India as well i.e. goods are purchased from outside India and sold outside India without goods entering into Indian borders.

Such orders it is neither an export of goods as the goods are not exported from India nor import of good as the goods does not enter Indian borders.

Schedule III of CGST Act states the transactions or activities which shall be treated neither as a supply of goods nor a supply of services. Therefore, if sales is made by an Ebay Seller in which goods are purchased outside India and sold outside India then such transaction is not considered as supply and therefore levy of GST doesn’t arise.

How to Report RCM on Payoneer Charges

Ebay uses Payoneer to pay registered Ebay Sellers in India. Payoneer collects payments from Ebay and remit it into the bank Account of the Ebay seller after deducting its fee. This Fee is charged by payoneer to facilitate the remittance to Ebay seller. As Payoneer is located outside India and it is providing services to Ebay Sellers within India, it will be considered as import of service and will be charged to GST under RCM.

Ebay Charges which Falls under RCM

Most of the charges charged by Ebay does not falls under RCM. To understand in more details, please check our article RCM on Commission Charges to Ebay

However, if there is any charges, which is paid by the Ebay seller to Ebay (which is not in the nature of intermediary services) then it will fall under RCM like fixed subscription charges of Ebay etc.