Electronic Commerce

Q 1. What is Electronic Commerce?

Ans. Electronic Commerce has been defined to mean the
supply of goods or services or both, including digital
products over digital or electronic network.

Q 2. Who is an e-commerce operator?

Ans. Electronic Commerce Operator has been defined to
mean any person who owns, operates or manages digital
or electronic facility or platform for electronic commerce.

Q 3. Is it mandatory for e-commerce operator to obtain registration?

Ans. Yes. The benefit of threshold exemption is not
available to e-commerce operators and they would be
liable to be registered irrespective of the value of supply
made by them.

Q 4. Whether a supplier of goods or services supplying through e-commerce operator would be entitled to threshold exemption?

Ans. No. The threshold exemption is not available to such
suppliers and they would be liable to be registered
irrespective of the value of supply made by them. This
requirement, however, is applicable only if the supply is
made through such electronic commerce operator who is
required to collect tax at source.

Q 5. Will an e-commerce operator be liable to pay tax in respect of supply of goods or services made through it, instead of actual supplier?

Ans. Yes, but only in case of certain notified services. In
such cases tax shall be paid by the electronic commerce
operator if such services are supplied through it and all
the provisions of the Act shall apply to such electronic
commerce operator as if he is the person liable to pay tax
in relation to supply of such services.

Q 6. Will threshold exemption be available to electronic commerce operators liable to pay tax on notified services?

Ans. No. Threshold exemption is not available to e-
commerce operator who are require to pay tax on
notified services provided through them.

Q 7. What is Tax Collection at Source (TCS)?

Ans. The e-commerce operator is required to collect an
amount calculated at the rate not exceeding one
percent of the net value of taxable supplies made
through it, where the consideration with respect to
such supplies is to be collected by such operator. The
amount so collected is called as Tax Collection at Source
(TCS).

Q 8. It is very common that customers of e- commerce companies return goods. How these returns are going to be adjusted?

Ans. An e-commerce company is required to collect tax
only on the net value of taxable supplies. In other words,
value of the supplies which are returned are adjusted in
the aggregate value of taxable supplies.

Q 9. What is meant by “net value of taxable supplies”?

Ans. The “net value of taxable supplies” means the
aggregate value of taxable supplies of goods or services
or both, other than the services on which entire tax is
payable by the e-commerce operator, made during any
month by all registered persons through such operator
reduced by the aggregate value of taxable supplies
returned to the suppliers during the said month.

Q 10. Is every e-commerce operator required to collect tax on behalf of actual supplier?

Ans. Yes, every e-commerce operator is required to
collect tax where consideration with respect to the
supply is being collected by the e-commerce operator.

Q 11. At what time should the e-commerce operator make such collection?

Ans. The e-commerce operator should make the
collection during the month in which supply was made.

Q 12. What is the time within which such TCS is to be remitted by the e-commerce operator to Government account?

Ans. The amount collected by the operator is to be paid
to appropriate government within 10 days after the end of
the month in which amount was so collected.

Q 13. How can actual suppliers claim credit of this TCS?

Ans. The amount of TCS deposited by the operator with
the appropriate government will be reflected in the cash
ledger of the actual registered supplier (on whose account
such collection has been made) on the basis of the
statement filed by the operator. The same can be used at
the time of discharge of tax liability in respect of the
supplies by the actual supplier.

Q 14. Is the e-commerce operator required to submit any statement? What are the details that are required to be submitted in the statement?

Ans. Yes, every operator is required to furnish a
statement, electronically, containing the details of
outward supplies of goods or services effected through it,
including the supplies of goods or services returned
through it, and the amount collected by it as TCS during a
month within ten days after the end of such month. The
operator is also required to file an annual statement by
31st day of December following the end of the financial
year in which the tax was collected.

Q 15. What is the concept of matching in e-commerce provisions and how it is going to work?

Ans. The details of supplies and the amount collected
during a calendar month, and furnished by every operator
in his statement will be matched with the corresponding
details of outward supplies furnished by the concerned
supplier in his valid return for the same calendar month or
any preceding calendar month. Where the details of
outward supply, on which the tax has been collected, as
declared by the operator in his statement do not match
with the corresponding details declared by the supplier
the discrepancy shall be communicated to both persons.

Q 16. What will happen if the details remain mismatched?

Ans. The value of a supply relating to any payment in
respect of which any discrepancy is communicated and
which is not rectified by the supplier in his valid return
for the month in which discrepancy is communicated shall
be added to the output liability of the said supplier, for
the calendar month succeeding the calendar month in
which the discrepancy is communicated. The concerned
supplier shall, in whose output tax liability any amount
has been added shall be liable to pay the tax payable in
respect of such supply along with interest on the amount
so added from the date such tax was due till the date of its
payment.

Q 17. Are there any additional powers to tax officers available?

Ans. Any authority not below the rank of Deputy
Commissioner may issue a notice to the electronic
operator to furnish specified details within a period of 15
working days from the date of service of such notice.