Page 19 - GSTL_27th August 2020_Vol 39_Part 4

GST REGISTRATION IN E-COMMERCE
MODEL
By
CA Sagar V. Shah, FCA, ISA (ICAI), M.Com.
SAGAR V. SHAH & ASSOCIATES

As we celebrate third anniversary of GST, the
journey is for sure a long one. There are many critical
areas which if not addressed prudently can cost a busi-
ness its very survival. One of the areas is e-commerce
model. This millennial business model has always been in the limelight of legal
discussions, considering its non-physical presence and invisible trade character-
istics. Every law is modelled in a way to capture transactions of such business
model as early as possible in the sequence of transactions to avoid tax leakages.
GST ensures the same via TCS, TDS and RCM provisions on e-commerce opera-
tor. This article deals with this issue and will revolve around two types of
e-commerce models which are as under :
(1) Amazon model : In this model, a supplier of goods directly issues in-
voice to the customer. Amazon collects the said consideration, is-
sues invoice to the supplier for the commission and pays net
amount to supplier after deducting its commission (inclusive of
GST). Moreover, Amazon will also deduct TCS (apart from commis-
sion) as per provisions of Section 52 of CGST Act, 2017.
(2) Uber model : In this model, Uber issues one invoice to customer for
cab services and another invoice to cab-operator for its commission.
Ultimately Uber pays net amount to cab-operator after deducting its
commission (inclusive of GST).
Issue of TDS
It is important to understand why Uber model is not required to deduct
TCS in its transactions whereas Amazon is. When we closely refer sub-section (1)
of Section 52 of CGST Act, 2017, it goes as under :-

GST LAW TIMES  27th August 2020  19