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E-Commerce Operators are website/apps like Flipkart and Amazon

Vendors sell their Goods to Customers through these websites.

There can be two cases:-

Case 1

Reverse charge in GST is notified on transaction

In this case, the E-commerce company pay GST

Example 1:-

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

Case 2

Reverse charge in GST is not applicable (Not notified on transaction)

In this case, the vendor  pay GST

E-commerce company deducts TCS on the transaction

Example 

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

Suppose there is no reverse charge and TCS Rate is 1%

Flipkart has to pay 1800 to Vishal Trading Company

it will charge 1% TCS on this 1800 i.e Rs 18

Hence actual amount paid to Vishal Trading company=1800 - 18 = Rs1782

TCS in GST Image 2.jpg

Summary

Those transactions which are not covered in Reverse Charge in GST will be covered here

COVERED IN REVERSE CHARGE NOT COVERED IN

FLIPKART pays GST in this case on Sales Amount

Flipkart Does not pay GST in this Case on Sales Amount

No TCS is applicable in this case

TCS at 1% is to be deducted from Vendor

Vendor does not pay GST

Vendor pays GST and Deducts TCS Amount

  1. GST - Goods and Services Tax, India
  2. GST Computation & Accounting
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About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 7 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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