E-commerce
Any application that uses the internet, such as e-mail, texting, shopping baskets, web services, Universal Description Discovery and Integration (UDDI), File Transfer Protocol (FTP), and Electronic Data Interchange (EDI), is considered an electronic commerce. This includes the supply or receipt of goods and services as well as the transmission of assets or information, whether or not the payment is made online and whether or not the operator makes the final delivery of the goods and additional.
E-commerce Operator
An e-commerce operator is an individual who, whether directly or indirectly, represents, runs, or oversees an online marketplace that promotes the supply of goods and other services.
An operator would also be someone who provides any information or other services related to or associated with the supply of goods and businesses through an electronic platform. However, an individual offering goods or services on their own would not be regarded as an Operator.
For example, Amazon and Flipkart are considered e-commerce operators because they promote and facilitate the supply of goods through their platform from legitimate suppliers (also known as the marketplace model or fulfilment model). For the purposes of this arrangement, Titan, however, would not be regarded as an e-commerce operator because it sells watches and jewels on its own website. In other words, with regard to the supplies that they independently record, Amazon and Flipkart won’t be considered e-commerce operators (a.k.a. the inventory model).
Legal Compliances To Be Done By E-commerce Operators
When supplies of goods and/or services are made through an e-commerce operator, the operator is obliged to deduct (collect) a certain amount from the consideration paid to the legitimate supplier of goods or services. The amount that is thus withheld or gathered is known as Tax Collection at Source (TCS).
The sum collected by the operator is to be paid to the credit of appropriate government inside 10 days after the end of the month in which sum was so collected.
Additionally, within 10 days of the end of the calendar month to which the statement relates, the operator must electronically file a Statement detailing all amounts collected by him for the outward supplies made through his Portal. The true supplier(s)’ names, the specifics of the supplies they made, and the amount they were paid would all be listed in the aforementioned statement.
The e-commerce operator required to outfit information to the Government relating to:
- Provision of goods or services carried out by the operator at any time
- load of goods held by a legitimate supplier who supplies through this operator in the godowns or warehouses that are owned by the operator and that the legitimate supplier has registered as an additional place of business.
Asserting Of Credit Of Tcs By Supplier
Based on the operator’s filed statement, TCS that is deposited into government records will be reflected in the money ledger of the actual registered supplier, whose record the collection was made. The same can be applied when the legitimate supplier releases the tax risk associated with the supplies.
Concept Of Coordinating In E-commerce
The information provided by each operator in his statement regarding the supplies and total amount collected during a given month will be compared to the relevant information provided by the supplier in his valid return filed for that month or any previous month regarding outward supplies. When the operator’s statement of the outward supply details—on which the tax has been collected—does not match the supplier’s corresponding details, the differences should be shared with both parties.
In the event of confusion, the value of a supply related to any payment regarding which a discrepancy is reported and which the supplier does not correct in his valid return for the month in which the discrepancy is reported should be added to the supplier’s yield obligation for the calendar month that follows the month in which the discrepancy is reported. The supplier in question, to whose yield tax obligation any amount has been added, may be required to pay interest at the rate specified on the amount added, as well as the tax payable for the supply from the date the tax was due until it was paid.
