Implication of GST on e-commerce Sellers
The Goods and Services tax is the single biggest reforms in India’s indirect tax structure. The terminology of goods and services tax apply on right from the manufacturing to delivery to final consumers. It reduce the complexities of multiple taxes and file the multiple taxes returns. There is no doubt, GST hails the overall tax structure in the nation and e-commerce industry has also been affected by this reform. As an e-commerce marketer or entrepreneur you need to have an idea of GST reforms. It goes without saying, GST is going to have a major impact on e-commerce industry in this nation. Besides consumers; this business entity has two major players, e-commerce marketplace and the sellers. The examples of e-commerce marketplace are Amazon, Flipkart, and snapdeal are required to make some necessary adjustment for running business in India. Along with that the reformation of GST also impact on e-commerce sellers. In this blog you are going to understand the impact of GST on e-commerce sellers.
If we see the impact of GST on e-commerce companies on a high level, it seems that GST will prove to be beneficial for e-commerce companies in the country. After the implication of GST, the burden of multiple taxes is no longer. At a national level it also expected to open better avenues for the small and e-commerce business. Previously these sellers were limited to operating a business within a state. Now, they can easily distribute their goods and services to another state hassle-free, without filling multiple taxes. Hence, e-commerce sellers need not be burdened by multiple taxes while transferring or selling products and services to various states.
GST Registration is mandatory: As per the GST law, those e-commerce sellers whose annual turn over is more than Rs. 20 Lakh have to apply for GST registration in India. But, the GST registration in India is relaxed for the e-commerce sellers whose turnover less than Rs. 10 lakh only for northern- eastern state. However, e-commerce sellers registration is necessary, no matters whether their turnover is lesser than Rs. 20 Lakh or not. The GST has reduced the fraudulent e-commerce activities. Every e-commerce seller has to register with tax authority.
Easy to file return: E-commerce sellers are eligible for the composition scheme. That means they don’t need to fill quarterly returns if they have not turnover more than Rs. 75 Lakh. instead of monthly and pay tax at a low rate which is only 2% respectively. The major reason to execute this rule to prevent e-commerce industry from fraudulent sellers. Taking the help of GST service providers in meeting compliance has become necessary. There is no doubt, the GST on long run will create a level playing field e-commerce marketplaces, streaming line their services, increases business growth. So, if you need a GST service who can help you in filing return, get in touch with Unilex consultants. Here the professionals will help you regarding all GST issues at the best market rates.
When it comes to filling GST return, e-commerce sellers have to follow the procedure like other businesses. As per the GST return law, an e-commerce seller needs to collect the amount of 1% of the net value of the supply. The major objective behind this methodology to encourage e-commerce sellers to follow GST regulations.
Tax Collected at Source: E-commerce business are required to deduct 2% of TCS on the net estimated value as the GST liability of the seller and deposit with government. Further, the sale reported by the e-commerce sellers and e-commerce marketplace need to tally at the end of the month. Errors, assuming any, will be added to the turnover of the seller and they will liable to pay GST on the additional month. This move encourage the e-commerce seller to tally their data and deposit tax correctly.
Increase in Credit: To cover the goods and services used by the companies in the course of business, the GST law has inaugurated input tax credit. In which e-commerce sellers need to maintain a direct relationship between the input material and the final products/services diminished. Like other business entities, now e-commerce sector have to avail input tax credit. The clear definition of input tax credit is at the time of paying tax on output, you can reduce the tax you have already paid on the inputs that it can reduce the tax liability.
Cash on delivery refund: In developing like India, cash on delivery is one of the most preferable options. The refund on such orders are issued after reconciliation of 7-10 days if the tax have already been paid. This issue has been under taken of GST.
The impact of GST on logistic and warehouse:
To remove the cascading taxes, government has introduce GST to reduce the cost incurred in e-commerce logistic. Under GST, e-commerce companies can decrease warehousing costs, as they not keep up gigantic distribution centres over different state in India. Such warehouses were prior working under their rated capacities. Now, after implication of GST in India, the e-commerce companies can opt for maintaining a few warehouses at strategic location. With the free movement of goods and services and uniform tax rates across states, e-commerce sellers are liable to transport their goods and services to other states.
It goes without saying, the GST is certain to have a positive outreach to the e-commerce businesses. The structure will decrease the operation cost up to 20% respectively. Additionally decreasing the cost of warehouses and logistics. The e-commerce business will presently be allowed to import items from SMes, thus enriching the qualities of products. Hence, we can say that, the GST in the long run will take a dimension playing field for the e-commerce industry and expand business development. If you need help regarding GST services, you can take the help of our professionals, who have an extensive experience in regarding GST services.
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