GST applicability for e-commerce business

GST applicability for e-commerce business

Hi,
I am from Ahmedabad, Gujarat. Very soon I am planning to launch a online shopping portal, specifically mobile app. for online shopping offering Traditional Clothes for Ladies. For that, I have already formed a private limited company (Registered Office based in Ahmedabad) and got it registered with ROC, Gujarat. GST registration will also be applied within few days. 

Below are few facts about activities of my shopping app.

(A) As a E-commerce business, I am applying for GST Registration for my online shopping app.
(B) Gujarat based small suppliers / manufacturers of traditional ladies clothes whose products will be displayed on shopping app. These local manufacturers are not GST registered as their turnover is less than INR 40.00 Lakhs.
(C) My online shopping app. initially will be available for Gujarat State only. (Suppliers & Buyers will be from the state of Gujarat only)

Below are my queries / concerns.

(1) Whether Local Suppliers needs to get GST registration to sell their products on my shopping app.? (Considering their turnover will remain less than INR 40.00 Lakhs for FY:2021-22)

(2) Can my shopping app. provide Supplier’s Non-GST Invoice to buyers? Or I should raise my own GST Invoice to customers?

(3) What would be ideal Invoicing System or procedure for my this e-commerce business?

Asked 3 years ago in GST

- You are acting as an e-commerce operator. In such a business model, GST registration is mandatory without any threshold limit.

1) Yes ask for GST registration before their registration on mobile app

2) Yes your app can generate invoice on behalf of vendors just like amazon, flipkart invoices. You will be liable to raise invoice to vendors for your market place fees and shipping charges. You will also be liable to collect TCS on payments collected on behalf of vendors and file TCS returns.

For detailed discussion, you may contact over a phone

Vivek Kumar Arora

CA, Delhi

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Hi,

The following are the answers to your queries

(1) Local Supplier is mandatorily required to get GST registration in case doing the business over the ecommerce even though they are supplying goods locally and turnover is less than ₹40 Lakhs.

(2) You will work as a commission agent only and your supplier will be billing directly to the customer.

(3)You will be billing to your supplier with your commission amount and your sellers will be billing to the customers directly.

Hope i am able to solve your query.

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CA Shubham Bansal

Shubham Bansal

CA, Amritsar

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It is mandatory for e-commerce operator to obtain GST registration irrespective of the value of supply made by them.

1. Gst Registration for the person selling through e-commerce operator: All the members who undertake supplies through e-commerce websites, should mandatorily obtain GST registration irrespective of the value of supply made by them. The entity should apply for the GST registration irrespective the ownership of the websites and goods supplied.

2. You can raise your own invoice.

Please have a phone consultation for details discussion.

Karishma Chhajer

CA, Jodhpur

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Thanks you all for your reply.
Now the thing is: My suppliers don't agree to get GST Registration, in that case can I allow their product to display on my shopping app./website? when any customer buy product from shopping app., I receive non-gst purchase invoice from my supplier and I raise my GST Invoice to the customer. Is this possible? It would be a sort of trading business and not an E-commerce operator. (my suppliers are those women who are running a small boutique from home on a very small scale. so they don't ready for GST Registration.)

Asked 3 years ago

Yes it is compulsory to have GST registration to sell online but may be since you are only selling in Gujarat you might be able to save them from taking GST registration as there will be no inter state supply.

We need to discuss more on it and understand the model.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you.

You can even book phone consultation for same.

Naman Maloo

CA, Jaipur

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1. The suppliers need to get a GST registration mandatorily without any threshold limit. The exemption is available only in case of e-commerce supplier of services and not for goods.

2. Not applicable.

3. In such cases where the suppliers are not registered, a way out could be - the supplier invoices to you and you invoice to the customer. This won't be direct selling of products by the supplier to the customers. You won't be an intermediary or a commission agent here but merely a trader.