GST is the single biggest tax reform in India aimed at replacing all indirect taxes like sales tax, service tax, VAT, custom duty, central sales tax, entertainment tax, luxury tax etc. GST is “one indirect tax” on the supply of goods and services, right from manufacturers to the end consumer for the entire country, which will make India one unified common market. In the current scenario, indirect tax is highly complex due to multiplicity of taxes, compliances issues obligations, tax overlaps.
Let’s first understand what Electronic Commerce & Electronic Commerce Operator means under the ambit of GST: “Electronic commerce” is the supply of goods or services or both of them. This includes digital products sold over digital or electronic network; { as under Sec.2 (44) of CGST Act}
An “Electronic commerce operator” is any person who owns, operates or manages digital or electronic facility or platform for electronic commerce. { as under Sec.2 (45) of CGST Act}. Also, a person providing information or any other services incidental to or in connection with such supply of goods & services through electronic platform will be considered as an Operator.
The introduction of GST is the boldest and single largest tax reform since the opening up of economy. It aims at providing a cohesive tax approach across India. For online businesses especially for eCommerce, it is a welcome step as passing of GST tends to rationalize seamless integration of goods and services across the country.
eCommerce has been defined absolutely under the GST Act.
‘Electronic commerce’ shall mean the supply or receipt of goods 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 or services is done by the operator.’
GST not only revamps the current paradigm of indirect taxes but also improves tax compliances.
GST brings in the uniformity through centralized registration which makes it easier for online businesses to get started. This centralized system replaces the old and rigid process of VAT registration issued by Sales Tax Department.
