Electronic Commerce – CA Final IDT Study Material

Electronic Commerce – CA Final IDT Study Material is designed strictly as per the latest syllabus and exam pattern.

Electronic Commerce – CA Final IDT Study Material

Question 1.
ABC Ltd. a registered supplier of goods is affecting supplies through E-commerce Ltd. (an electronic commerce operator). It has made taxable supplies of goods amounting ₹ 30,00,000 in month of December 2019 through E-Commerce Ltd. The E-Commerce Ltd. has returned goods amounting ₹ 7,50,000 to ABC Ltd. during the month of December. What shall be the amount of tax to be collected at source by E-commerce Ltd. (Presuming it is an Inter State Supply)
Answer:
As per section 52 of CGST Act, 2017:
Every electronic commerce operator, not being an agent, shall collect an amount calculated at such rate not exceeding 0.50% (1% in case of IGST Act), as may be notified by the Government on the recommendation of the council, of the NET value of taxable supplies made through it by other supplier where the consideration with respect to the operator.
Calculation of the amount of tax to be collected at source by E-commerce Ltd.

Particulars
Value of taxable supplies of goods made by ABC Ltd. 30,00,000
Less:       Value of taxable supplies of goods return to ABC Ltd. 7,50,000
Amount on which tax is to be collected at source 22,50,000
Rate of TCS (IGST Rate) 1%
Amount of TCS (1% of ₹ 22,50,000) 22,500

Question 2.
Is it mandatory for e-commerce operator to obtain registration?
Answer:

  • The benefit of threshold exemption is NOT available to e-commerce operators (who is liable for TCS)
  • Thus, such ECO’s would be liable to be registered irrespective of the value of supply made by them.

Electronic Commerce – CA Final IDT Study Material

Question 3.
Explain the provisions relating to collection of tax at source under Section 52 of CGST Act, 2017?
Answer:
The following are the provisions of collection of Tax at Source [SECTION 52]:

Section 52(1)
Operator to Collect Tax on Supplies made through it

  • Notwithstanding anything to the contrary contained in this Act
  • Every electronic commerce (ECO) operator, not being an agent
  • shall collect an amount
  • calculated at such rate not exceeding 1% (2% in case of IGST)
  • as may be notified by the Government
  • on the recommendations of the Council,
  • of the NET value of taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the operator.

Section 52(2)
Other Modes of Recovery not to be Affected
The power to collect the amount specified in section 52(1) shall be without prejudice to any other mode of recovery from the operator.

Section 52(3)
Time Limit to Deposit Tax

  • The amount collected under section 52(1)
  • shall be paid to the Government by the operator
  • within 10 days
  • after the end of the month in which such collection is made
  • in such manner as may be prescribed.

Electronic Commerce – CA Final IDT Study Material

Section 52(4)
Time Limit to Furnish Statement

  • Every operator who collects the amount specified in section 52(1)
  • shall furnish a statement, electronically, containing the details of outward supplies of goods or services or both effected through it, including the supplies of goods or services or both returned through it, and
  • the amount collected under section 52(1) during a month
  • in such form and manner as may be prescribed,
  • within 10 days after the end of such month.

Section 52(5)
Last Date to Submit Annual Statement

  • Every operator who collects the amount specified in 52(1)
  • shall furnish an annual statement, electronically
  • containing the details of outward supplies of goods or services or both effected through it, including the supplies of goods or services or both returned through it, and
  • the amount collected under the said sub-section during the financial year,
  • in such form and manner as may be prescribed,
  • before the 31st day of December following the end of such financial year.

Section 52(7)
Credit of Tax in Electronic Cash Ledger

  • The supplier who has supplied the goods or services or both through the operator
  • shall claim credit
  • in his electronic cash ledger
  • of the amount collected and reflected in the statement of the operator furnished under section 52(4)
  • in such manner as may be prescribed.

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