Gst in e-commerce

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 May 2018 Dear Seniors,

i am going to start my E-commerce business where i have few queries regarding GST.. please guide

I will be doing business of food products where i have small suppliers who doesnt have any GST and neither they are interested to take GST registration.....Can i act as e-commerce seller for them and as an independent e-commerce operator for big suppliers and pay GST and collect TCS

What if i consider everyone as supplier and sell on my website and pay GST under my company registration

My main concern what should i do to take my business forward with such small suppliers who doesnt have GST

Is it possible for me that i collect materials and sell them on my website and pay GST as a company so that i can avoid Tax collection at source...

Please guide...

CA Padmasri Manyam

CA Padmasri Manyam (Expert)
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16 May 2018 Currently TCS provisions are not applicable. Once the provisions are made applicable, the supplier of goods through e-commerce operator should take mandatory registration under GST (irrespective of their turnover). But many suppliers will not be willing to take registration unless their business is more than 20L.
To continue business with such small suppliers, you can buy from them and supply to customers. In this case, the supplier issued tax invoice in your name (e-commerce) and you will issue tax invoice in the name of customers.
If the goods are supplied by e-commerce operator itself (owner of the goods) through e-commerce platform then TCS provisions are not applicable.

Querist : Anonymous

Querist : Anonymous (Querist)

16 May 2018 if vendor doesnt have GST registration... how they will give tax invoice to me.......

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Querist : Anonymous

Querist : Anonymous (Querist)

16 May 2018 Can i show all sellers of ecommerce platforms as my suppliers so that i can issue GST invoice to customers straightaway

CA Padmasri Manyam

CA Padmasri Manyam (Expert)
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17 May 2018 Yes you can do that as i told above, you need to procure and sell to customers with your tax invoice.

CA Padmasri Manyam

CA Padmasri Manyam (Expert)
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17 May 2018 If vendor is not registered he will issue invoice without GST. Currently no RCM on URD procurement.
once the said provisions come to effective you need to pay tax under RCM and take credit of the same.

Querist : Anonymous

Querist : Anonymous (Querist)

17 May 2018 Madam can you please explain RCM and its limit & eligibility and how i can take credit of the same?

CA Padmasri Manyam

CA Padmasri Manyam (Expert)
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17 May 2018 As per Section 9(4) of CGST Act, registered person procuring goods or services from unregistered supplier shall pay tax under RCM and claim input tax credit of such tax paid (can be taken in same month). However, the said provisions are deferred till 30th June 2018. Once they implement we will get to know upto what value there will not be tax under RCM. Earlier procurement in a day less than 5000 from all the suppliers no tax under RCM. We need to wait for the notification to implement RCM provision for better clarity.

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Querist : Anonymous

Querist : Anonymous (Querist)

17 May 2018 As on date if my procurement is less than Rs. 5000 then do i need to pay GST and charge GST to my customers? Is it ok if I start selling without GST till June18

CA Padmasri Manyam

CA Padmasri Manyam (Expert)
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17 May 2018 till June 2018 you can sell without GST because there is no tax liability under RCM.

NYKNYK

NYKNYK (Querist)
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18 May 2018 if my unregistered supplier supplies products from Bangalore to Ahmedabad customer that is interstate.....is there any problem in RCM under gst or any other tax liabilities which can arise in this case

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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26 July 2024 In the scenario where an unregistered supplier supplies products from Bangalore to a customer in Ahmedabad, the key GST considerations and potential issues are as follows:

### **1. **Understanding the Scenario**

- **Supplier**: Unregistered under GST.
- **Customer**: Located in Ahmedabad (a different state from the supplier in Bangalore).
- **Supply**: Interstate supply of goods.

### **2. **GST Implications**

#### **A. **Reverse Charge Mechanism (RCM)**

- **RCM for Unregistered Suppliers**: As per GST law, when an unregistered supplier makes an interstate supply of goods or services to a registered recipient, the recipient is required to pay GST under the Reverse Charge Mechanism (RCM).

**In this case**:
- Since your supplier is unregistered and you (the customer in Ahmedabad) are likely registered under GST, you would need to pay GST under RCM.

#### **B. **Liabilities and Compliance**

1. **RCM Compliance**:
- **Tax Payment**: You, as the recipient, will need to pay GST on the supply under RCM. This involves calculating the applicable GST rate on the value of the goods supplied and paying the tax directly to the government.
- **Invoice**: The unregistered supplier will not issue a GST invoice. Instead, you will need to self-generate an invoice under RCM and report the transaction in your GST returns.

2. **Filing and Reporting**:
- **GSTR-3B**: Report the RCM liability in your GSTR-3B under the section for reverse charge.
- **GSTR-1**: Report the receipt of goods from an unregistered supplier in your GSTR-1.

3. **Input Tax Credit (ITC)**:
- **ITC Claim**: You can claim input tax credit on the GST paid under RCM, provided the goods are used for taxable supplies.

#### **C. **Additional Considerations**

1. **Compliance with Place of Supply**:
- **Place of Supply**: Since the supply is interstate, the place of supply rules under GST apply. For goods, the place of supply is generally the location where the goods are delivered.

2. **Potential Issues**:
- **Documentation**: Ensure you maintain proper documentation of the purchase, including the invoice from the unregistered supplier and any proof of payment.
- **GST Registration**: Ensure that your own GST registration is active and compliant.

### **3. **Example**

**Scenario**:
- **Goods Supplied**: ₹1L
- **GST Rate**: 18%

**RCM Calculation**:
- **GST Payable**: ₹1L × 18% = ₹18K

**Accounting**:
- **Self-Invoice**: Generate a self-invoice for the purchase under RCM.
- **Pay GST**: ₹18K as per the RCM provisions.
- **Claim ITC**: Record and claim ITC for the ₹18K GST paid.

### **Summary**

- **RCM Liability**: As an interstate supply from an unregistered supplier, you must pay GST under RCM.
- **Payment and Reporting**: Pay GST directly and report the transaction in your GSTR-3B and GSTR-1. Ensure proper documentation.
- **Input Tax Credit**: Claim ITC for the GST paid under RCM, provided it is used for taxable supplies.

By adhering to these guidelines, you can ensure compliance with GST regulations and manage any potential tax liabilities effectively.

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