Foreign E-commerce companies need to apply for GST registration

Foreign E-commerce companies need to apply for GST registration

Foreign E-commerce companies need to apply for GST registration

The Goods and Services Tax has brought with it a number of instrumental changes – some which have led to a reformed Indian taxation system. Making this structure stronger, India now requires that foreign e-commerce companies apply for GST registration in every state. The Government has stated that the new provisions for tax collected at source (TCS) and tax deducted at source (TDS) have been made applicable at the beginning of the month, October 1.

The GST has cleared away the chaos and streamlined a series of processes which were earlier unstructured. The move was primarily aimed at making business processes smoother for organisations around the world. Starting this month, now both domestic and foreign e-commerce firms are required to deduct up to one percent state GST and one percent central GST on intrastate supplies of over Rs 250,000.

In the case of interstate supplies which exceeds Rs 250,000, the TDS will be two percent of integrated GST. At the same time for e-commerce sellers based out of the country, no TCS liability will exist. In the case of any individual dealers and traders selling goods or services online, they will receive their payment after deduction of one percent tax.

The sellers can claim their Input Tax Credit thereafter using the e-cash ledger. The ITC will also be collected as well as reflected by the operator of the online platform. Further, the amount will be credited by the government once the supplier’s claims are matched with the details as specified by the e-commerce operator via form GSTR-8. For the process to work effectively, e-commerce firms will have to deposit the TDS collected by 10th of the next month in which tax is collected.

The e-commerce firm will also be liable to produce an annual statement with details of outward supplies. Since the deadline to comply with the new TDS and TCS rules was far lesser than what is usually stated before any new rules; the e-commerce firms have little choice but to comply. From streamlining their Enterprise Resource Systems to reducing the impact on their accounting operations, this will be a hard task of ecommerce firms around the country. Our GST experts are available to help smoothen the process for your organization and also to plan for similar such unforeseen policy changes and additions. You can write to us at to understand how the new notification will impact your business.


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