4 min
E-Commerce Supply Taxation Taxes and Personal Finance
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- Economia
7 things you should know if you deal with Amazon, Flipkart, Snapdeal or any other online portal:
If you are selling goods through Amazon, Flipkart, Snapdeal or any other online website, then this podcast is for you. We shall discuss seven point which you need to know if you deal online. For the sake of simplicity, we shall use a common name “Amazon” for all online platforms.
1. First Point - GST Registration: You must know that GST Registration is Compulsory if you are selling goods on any online portal irrespective of your turnover. So, even if you are selling goods worth Rs. 100/- through Amazon, you need to get yourself registered under GST.
2. Second Point - TDS Deduction: So, if you are selling goods through Amazon, it will charge you certain amount. It may be commission, listing fee and so on. You get monthly invoices from Amazon. What you need to do is determine the nature of such expense. If it is in the nature of commission, you need to deduct TDS at the rate of 5%. If it is a contract, you will deduct TDS @ 2%.
After deduction, you need to pay TDS to the Government by 7th of next month.
In every quarter, you need to file TDS Return and include these online expenses on the PAN of the Amazon. Once you file TDS Return, TDS Certificate will be generated. You need to issue digitally signed TDS certificates to Amazon to get the refund of TDS paid by you.
3. Third Point - Input Tax Credit: You will see that Amazon has charged GST on their commission invoices. You get credit of such GST. The same will be reflected in your GSTR-2B and you need to take ITC of such GST in your monthly GSTR-3B Return. This will reduce your monthly GST liability. This credit will be set off against your GST payable on Sales.
4. Fourth Point - TCS under GST: When you receive payment from Amazon, you will see that there are certain deductions made by Amazon. One of the deduction is 1% under GST Law. What is that 1%? It is called TCS under GST Law. Is it a loss to you? The answer is No. You need to take credit of such TCS by filing TCS Return on GST Portal. After filing TCS Return, that 1% amount will be added to your GST Electronic Cash Ledger. You can utilise it for your GST payments.
5. Fifth Point - TDS Credit: Another deduction by Amazon in your payment is 1% under Income Tax Law. It is called TDS u/s 194-O of the Income Tax Act 1961. Again, this is not a loss to you. It is as good as your advance income tax. When you file your annual Income Tax Return, you need to claim this TDS. This will reduce your Income Tax Liability. You need to ensure that this 1% TDS is reflected in your form 26AS.
6. Sixth Point - Cross Charge under GST: If you supply goods to other states, you are required to be registered in each state from where you make supply of goods. Further, you need to make sure that you follow “Cross Charge” provisions under GST. If you fail to do so, there are serious implications for the same.
7. Seventh Point - Equalisation Levy: If you are purchasing goods from a Non-resident E-commerce operator, equalisation levy @ 2% applies on such transaction.
These were few of the legal provisions you need to comply with. This will maximise your profit and improve your cashflows.
Let us summarise the seven points:
1. GST Registration
2. TDS Deduction on Online Expenses
3. Input Tax Credit of GST on Online Expenses
4. TCS under GST
5. TDS u/s 194-O of the Income Tax Act
6. Cross Charge under GST
7. Equalisation Levy
Music: https://www.bensound.com
Thank you
7 things you should know if you deal with Amazon, Flipkart, Snapdeal or any other online portal:
If you are selling goods through Amazon, Flipkart, Snapdeal or any other online website, then this podcast is for you. We shall discuss seven point which you need to know if you deal online. For the sake of simplicity, we shall use a common name “Amazon” for all online platforms.
1. First Point - GST Registration: You must know that GST Registration is Compulsory if you are selling goods on any online portal irrespective of your turnover. So, even if you are selling goods worth Rs. 100/- through Amazon, you need to get yourself registered under GST.
2. Second Point - TDS Deduction: So, if you are selling goods through Amazon, it will charge you certain amount. It may be commission, listing fee and so on. You get monthly invoices from Amazon. What you need to do is determine the nature of such expense. If it is in the nature of commission, you need to deduct TDS at the rate of 5%. If it is a contract, you will deduct TDS @ 2%.
After deduction, you need to pay TDS to the Government by 7th of next month.
In every quarter, you need to file TDS Return and include these online expenses on the PAN of the Amazon. Once you file TDS Return, TDS Certificate will be generated. You need to issue digitally signed TDS certificates to Amazon to get the refund of TDS paid by you.
3. Third Point - Input Tax Credit: You will see that Amazon has charged GST on their commission invoices. You get credit of such GST. The same will be reflected in your GSTR-2B and you need to take ITC of such GST in your monthly GSTR-3B Return. This will reduce your monthly GST liability. This credit will be set off against your GST payable on Sales.
4. Fourth Point - TCS under GST: When you receive payment from Amazon, you will see that there are certain deductions made by Amazon. One of the deduction is 1% under GST Law. What is that 1%? It is called TCS under GST Law. Is it a loss to you? The answer is No. You need to take credit of such TCS by filing TCS Return on GST Portal. After filing TCS Return, that 1% amount will be added to your GST Electronic Cash Ledger. You can utilise it for your GST payments.
5. Fifth Point - TDS Credit: Another deduction by Amazon in your payment is 1% under Income Tax Law. It is called TDS u/s 194-O of the Income Tax Act 1961. Again, this is not a loss to you. It is as good as your advance income tax. When you file your annual Income Tax Return, you need to claim this TDS. This will reduce your Income Tax Liability. You need to ensure that this 1% TDS is reflected in your form 26AS.
6. Sixth Point - Cross Charge under GST: If you supply goods to other states, you are required to be registered in each state from where you make supply of goods. Further, you need to make sure that you follow “Cross Charge” provisions under GST. If you fail to do so, there are serious implications for the same.
7. Seventh Point - Equalisation Levy: If you are purchasing goods from a Non-resident E-commerce operator, equalisation levy @ 2% applies on such transaction.
These were few of the legal provisions you need to comply with. This will maximise your profit and improve your cashflows.
Let us summarise the seven points:
1. GST Registration
2. TDS Deduction on Online Expenses
3. Input Tax Credit of GST on Online Expenses
4. TCS under GST
5. TDS u/s 194-O of the Income Tax Act
6. Cross Charge under GST
7. Equalisation Levy
Music: https://www.bensound.com
Thank you
4 min