Online sellers can retail their products across e-commerce platforms such as Amazon, Flipkart, Meesho, and others. These platforms typically charge a commission from the seller, calculated as a certain percentage of the sale price. This discussion will delve into the GST registration process, return filing obligations, and invoicing regulations that online sellers must adhere to.
Understanding GST
GST is levied on the consumption of goods and services. It applies to all stages of production, from manufacturing to retail sales. Unlike traditional taxes, GST does not accumulate as it moves along the supply chain. Businesses can offset the tax at each stage until the end consumer bears it. Mandatory GST registration is required for companies with an annual taxable turnover exceeding the specified threshold.
GST registration for Amazon Business
Acquiring a GSTIN or Goods and Services Tax Identification Number for Amazon sellers operating in India is mandatory for online product sales. Here’s a step-by-step guide to obtaining a GSTIN as an Amazon seller:
Register Your Business Entity:
Select the appropriate business entity type (e.g., sole proprietorship, partnership, LLP, company) based on your business structure. During registration, please provide essential details such as name, address, PAN, and bank account.
Apply for GST Registration Online:
Visit the GST portal (https://www.gst.gov.in/) and complete the online application form (FORM GST REG-01) with the required details and supporting documents. Specify your business’s location (state and district) and the nature of your supply (goods, services, or both).
Verify Your Application:
Upon submission, you’ll receive an acknowledgment number (ARN) and a temporary reference number (TRN) via email and SMS. Verify your application using the OTP sent to your registered mobile number or email. Alternatively, utilize a digital signature certificate (DSC) for applications submitted by companies or LLPs.
Complete Verification and Obtain GSTIN:
The GST officer will process your application within three days. If approved, you’ll receive your GSTIN and a certificate of registration (FORM GST REG-06) via email. You’ll receive a notice of rejection (FORM GST REG-05) with reasons allowing you to reapply within 30 days.
Update Your Amazon Seller Account:
After obtaining your GSTIN, update your Amazon seller account to commence online product sales. Sign in to your seller account, navigate Settings > Account Info > > Account Info > Tax Information, and enter your GSTIN in the relevant fields. This ensures compliance with tax regulations while selling products on the Amazon platform.
Amazon Business Invoice Regulations
For Goods:
- Invoicing under GST should be issued on or before the delivery date in the standard case of goods.
- For a continuous supply of goods, invoicing under GST has to be issued on or before the day the account statement is issued.
For Services:
- Invoicing under GST should be issued for general services within 30 days of the supply.
- For services associated with banks or NBFCs, invoicing under GST has to be issued within 45 days of the supply being made.
Amazon Business invoice structure
To adhere to GST compliance standards, an invoice should contain the following details:
- Invoice number and date
- Customer’s name
- Shipping and billing address
- Customer and taxpayer’s GSTIN (if registered)
- Place of supply
- HSN code / SAC code
- Item details, such as description, unit (meter, kg, etc.), quantity (number), and total value
- Taxable value and discounts
- Rate and amount of taxes, including CGST, SGST, IGST
- Whether GST is applicable on a reverse charge basis
- Supplier’s signature.
Place of Supply rules for Amazon sellers
GST operates on a destination-based tax system, meaning goods and services are levied where they are consumed rather than where they originate. The place of supply holds significant importance under GST as it dictates the type of tax to be set.
Central Goods and Service Tax (CGST) and State Goods and Service Tax (SGST) are applicable if the place of supply and the supplier’s location are within the same state.
If the place of supply differs from the supplier’s location, Integrated Goods and Service Tax (IGST) is applicable.
GST Return Filing Guidelines for Online Sellers
Uniform Filing Provisions
Filing returns under GST remains the same for both online and offline sellers. Depending on your preference for Quarterly Return Monthly Payment (QRMP), GSTR-1 and GSTR-3B should be filed either monthly or quarterly.
Essential Considerations
For quarterly returns, it is necessary to file the Invoice Furnishing Facility (IFF).
GST returns must be initiated from the month of registration itself, even in the absence of transactions. Filing NIL returns is crucial to avoid penalties.
Invoicing Regulations for Online Sellers
Understanding GST Responsibility
One fundamental question arises: “Who bears the responsibility of paying GST? The seller or the e-commerce operator.” The unequivocal answer to this query is “the seller.” The e-commerce operator is a commission agent mediating between the buyer and the seller. Since the seller directly sells goods to the customer, they assume the liability to pay GST.
Invoicing Obligations
As a result, it is imperative for the seller to furnish a GST invoice to the buyer, inclusive of details such as GSTIN, address, product specifications, quantity, tax rate, tax payable, etc.
Convenience Offered by Major Platforms
Amazon offers sellers the convenience of generating invoices directly from their platforms. This simplifies the process, enabling sellers to print the invoice easily and include it with the product for delivery to the customer.
Also Read: E-Waybill Obligations For Goods Sold On E-Commerce Platforms
Conclusion
Businesses involved in taxable transactions of goods and services, surpassing a turnover of Rs. 20 lakh or Rs. 10 lakh in specific states, must undergo GST registration as regular taxable entities. This obligation applies to independent e-commerce vendors and those listing products on platforms like Amazon., except for items falling under the 0% GST category. GST registration guarantees compliance and allows businesses to access benefits such as uninterrupted tax credit input within the GST framework.
Frequently Asked Questions (FAQs):
Can I apply for GST registration as an individual seller on Amazon?
Yes, individual sellers on Amazon must also obtain GST registration if their turnover exceeds the prescribed threshold or sell goods that aren’t exempted. The registration process remains the same for both individual and business sellers.
How long does it take to obtain the GSTIN after applying for registration?
The processing time for GST registration is typically three working days. After approval, you will receive your Goods and Services Tax Identification Number (GSTIN) and a registration certificate.
What must I do if my GST registration needs to be approved?
If your application is declined, you will be issued a rejection notice (FORM GST REG-05) and the reasons for the rejection. You can reapply within 30 days of receiving the rejection notice.
Is updating my GSTIN on the Amazon seller account necessary?
Yes, updating your Amazon seller account with the obtained GSTIN is mandatory. This ensures compliance with tax regulations and enables you to continue selling products on the platform.
Can I access educational resources as an Amazon seller for GST-related matters?
Yes, Amazon provides free-of-cost education through Seller University and other learning resources. Sellers can learn from success stories and gain insights into managing their business in compliance with GST regulations.
