E-Commerce Companies are called Aggregators

This is because they do not sell goods and Services Directly to Customer

They act as middleman between buyer and seller


Example of Service in E- Commerce: -

Suppose a Customer Miss Kanika Requires Pest Control Service at her home

She approaches a Website (or App) called Urban Clap and books Service of SK Enterprises for Rs 1000

Miss Kanika pays Rs 1000 online to Urban Clap and Urban Clap keeps 300 Commission pays 700 to SK Enterprises

In this case, Service Provider is SK Enterprises and Service Receiver is Kanika

Neither of them pays GST

It is paid by E-Commerce Company Urban Clap

GST Urban clap image.jpg

Example of Goods in E- Commerce

Suppose a Customer Dinesh shops online at Flipkart and purchase a shirt for Rs 2000

This was sold by Dealer Vishal Trading Company

Flipkart deducts 10% Commission and pays Balance to Vishal Trading Company

In this case, Seller is Vishal Trading Company and Buyer is Dinesh

Neither of them pays GST

It is paid by E-Commerce Company Flipkart

GST flipkart image.jpg

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CA Maninder Singh's photo - Co-founder, Teachoo

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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.