GST

Definition & Concept :

The Model GST Law defines an Electronic Commerce to mean the supply or receipt of goods and/ or services, or transmitting of funds or data, over an electronic network, primarily the internet, by using any of the applications that rely on the internet, like but not limited to e-mail, instant messaging, shopping carts, web services, Universal description Discovery and integration (UDDI), File Transfer Protocol (FTP) and Electronic Data Interchange (EDI) whether or not the payment is conducted online and whether or not the ultimate delivery of the goods and/or services is done by the operator.

Indian GST Law defines an Electronic Commerce Operator (Operator) as every person who, directly or indirectly, owns, operates or manages an electronic platform which is engaged in facilitating the supply of any goods and/or services.

Also a person providing any information or any other services incidental to or in connection with such supply of goods and services through electronic platform would be considered as an Operator.

The GST Law also explains that a person supplying goods/services on his own account, however, would not be considered as an Operator. For instance, Amazon and Flipkart are e-commerce Operators because they are facilitating actual suppliers to supply goods through their platform (popularly called Market place model or Fulfillment Model). However, Titan supplying watches and jewels through its own website would not be considered as an e-commerce operator for the purposes of this provision. Similarly, Amazon and Flipkart will not be treated as e-commerce operators in relation to those supplies which they make on their own account (popularly called inventory Model).

Some of the features of a marketplace model are:

• This model allows a large, fragmented base of sellers to register and sell online on their platform.
• Marketplace charges a subscription fees/ commission on sale value from listed sellers.
• Customer on the other hand gain access to multiple sellers and competitive prices for desired products.
• Items purchased on such marketplaces are either shipped by Merchant/Third-party seller directly or through the fulfillment center managed by Marketplace Operator.

The main feature of the market place model is that the e-commerce firms like Flipkart, Snapdeal, Amazon etc. will be providing a platform for customers to interact with a selected number of sellers. When an individual is purchasing a product from Flipkart, he will be actually buying it from a registered seller in Flipkart. The product is not directly sold by Flipkart. Here, Flipkart is just a website platform where a consumer meets a seller.

Registration of E-Commerce Operator under GST :

An E-commerce operator and persons who supply goods through e-commerce operator have to compulsorily register themselves under the present GST regime irrespective of their amount of turnover.