Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

GST Implications for Affiliate Marketing

Sonia Bansal (Student) (38 Points)

29 May 2020

I earn commission by referring people from my website to an E-commerce operator's website.

Please help me with the following queries in accordance with the latest GST laws.

1. Am I liable for mandatory registration if my supply does not exceed Rs. 20 lakhs? (I do not think I fall under the definition of an agent as I am not carrying business on E-commerce operator's behalf)

2. Can I take the advantage of the exemption provided for the registration of a person providing Inter-state supply of services if the supply does not exceed Rs. 20 lakhs.

3. If I am not liable to register under prevalent GST laws, will the e-commerce operator have to pay GST on Reverse Charge Mechanism? (Purchase of supply from an unregistered person)

Reply
Follow
Share

8 Replies

Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 30 May 2020

1. You do cover under agent , but not an Consignment Agent . As per the Defination u/s 2(5) , it includes commission agent , but the agent who helps in procuring order are not cover under section 24 of CGST of mandatory Registration of Agent. the same has been clarified in Circular 57/31/2018 GST. So you can enjoy the threshold limit of 20 lac as prescribed in Section 22 of CGST Act.

2. Yes

3. There is no RCM , so E-commerce not required to pay on RCM .

Yes there are Services on which E-commerce is liable pay on RCM : House keeping, Plumbing,carpentering (Notification 23/2017 CT (R)).
As per Notification 17/2017 CT (R) on following services on which E-commerce is liable pay in RCM :
services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor
cycle;
services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites
or other commercial places meant for residential or lodging purpose.

Upgrade to CAclubindia Pro. Subscribe Now!

Sonia Bansal (Student) (38 Points)
Replied 30 May 2020

Thank you so much sir.

As for point no. 3, commission paid will be treated as an expense by E-commerce operator in his P/L account, so won't that attract GST on RCM?

Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 30 May 2020

Yes , correct

Sonia Bansal (Student) (38 Points)
Replied 30 May 2020

Can input credit be taken by the E-commerce operator for the GST paid on such commission?

Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 31 May 2020

Yes the ITC available on such commission.

Upgrade to CAclubindia Pro. Subscribe Now!

AmaraAgrawal (Others) (32 Points)
Replied 17 October 2020

Thank you very much Pankaj Rawat for clarifying this question. I wasn't sure about the third question.

Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 17 October 2020

There is no RCM , so E-commerce not required to pay on RCM . Yes there are Services on which E-commerce is liable pay on RCM : House keeping, Plumbing,carpentering (Notification 23/2017 CT (R)). As per Notification 17/2017 CT (R) on following services on which E-commerce is liable pay in RCM : services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle; services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purpose. avater Sonia Bansal (Student) 30 May 2020

Read more at: https://www.caclubindia.com/forum/gst-implications-for-affiliate-marketing-548602.asp

DEAR AMARA

E-COMMERCE IS LIABLE TO UNDER RCM ONLY:

Service provided plumbing,carpenter, house keeping - NOTIFICATION 27/2017 CT (R) & hotel accommodation & transportation of passenger -Notification 17/2017

hence E-commerce is liable to pay under RCM only when above services being provided

Utathya Kotadia (Programmer IT) (22 Points)
Replied 19 October 2020

Admittedly, the information I found online is not concrete, and people have different opinions on different platforms. I only recently started learning more about affiliate programs, and I still have very many questions to figure out. As much as I know, the law requires any person giving inter-state services to register under GST regardless of the turnover, but smaller publishers can claim their earnings without GST. However, I'm not sure if this is true information, so a piece of advice would be helpful.