The e-commerce industry is undergoing a period of substantial change and governmental scrutiny. If the Press Note No 3 of 2016 issued by the Department of Industrial Policy & Promotion was any authoritative indicator that the government has realised the glaring regulatory gaps in the e-commerce sector, the Model GST Act has gone a step further to put the spotlight on streamlining indirect tax levy on e-commerce companies.
The Model GST Act has dedicated an entire chapter (Chapter XIB) to ‘electronic commerce’ which details the various definitions and manner of collection of tax. ‘Electronic commerce’ has been defined under the Model GST Act as the supply or receipt of goods and/or services or transmitting of funds or data over electronic network by using any of the applications that rely on the internet, irrespective of whether the payment is conducted online and whether the ultimate delivery of goods and/or services is undertaken by the operator.
‘Electronic commerce operator’ is defined as any person who directly or indirectly owns, operates or manages an electronic platform that is engaged in facilitating the supply of any goods and/or services or in providing any information or any other services incidental to or in connection therewith. It does not include persons engaged in supply of such goods and/or services on their behalf. Interestingly, ‘aggregator’ has been defined separately to mean a person who owns and manages an electronic platform to enable a customer to connect with persons providing a service under the brand name of the aggregator. There seems to be some overlap between the definition of an aggregator and an e-commerce operator. However, in accordance with the wording of these definitions, the ‘aggregator’ pertains only to e-commerce platforms offering services under their brand name. Both e-commerce operators as well as aggregators are required to register as ‘taxable persons’ under the Model GST Act and discharge tax liability.
(Sourced from agencies, Feature image courtesy:financialexpress.com)
