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GST & Tax FAQs

For any GST or Tax related query write to us at the below email id.

+ - What is GST?

Goods and Services Tax (GST) is the latest system of Indirect Taxation in India, which has replaced many individually applied taxes into a single tax. This taxation system has been in effect since July 1, 2017.

What are the different Tax types and how are they applied in the GST taxation system?

There are 4 GST types namely: Integrated Goods and Services Tax (IGST), State Goods and Services Tax (SGST), Central Goods and Services Tax (CGST), and Union Territory Goods and Services Tax (UTGST).

Type of GSTWhen is it applicable?
CGSTWithin same state, i.e. intrastate
SGSTWithin same state, i.e. intrastate
IGSTBetween two different states or a state and a Union Territory, i.e. interstate
UTGSTWithin same Union Territory (UT)

 

If my product selling cost is 500 and shipping cost is 100, Will I have to pay GST on 500 or 600?

GST is applicable on the full value of consideration. We recommend you to reach out to your tax advisor for more information.

What GST percentage will be charged for services provided by Caelum?

18% GST will be charged on services provided by Caelum.

What about HSN codes? Why is Caelum not asking to update HSN? Is it going to remain optional? Isn’t it mandatory to have HSN code in the invoice?

Yes, there is certain threshold limit prescribed by the GST Council for HSN declaration in the tax invoice. A placeholder is given to update the HSN against each respective ASIN’s listed.

If you input the HSN, the same will propagate to the invoice. HSN field has been kept as optional field for seller’s listing.

If seller’s annual turnover crosses the threshold notified by GST authorities, seller in their own discretion, to comply with the compliance requirement, can update relevant HSN applicable for their listings. We recommend you to reach out to your tax advisor to get the appropriate HSN codes for your products.

What are the basic return compliance requirements for a Seller?

A Seller has to file the details of the outward supplies made during the month in GSTR – 1 by the 11th of the following month. Additionally, by 20th of the following month, the Seller has to file a consolidated return in GSTR – 3B. The Seller also has to pay net GST liability after availing credit on inputs, input services and TCS by 20th of the following month.

Apart from all of the above, a Seller has to file an annual return by December 31 following the end of the financial year.

Note: These timelines are subjected to change based on the notifications by Central Board of Indirect Taxes and Customs (CBIC).

+ - Tax Deducted at Source (TDS) FAQ

Frequently Asked Questions (FAQ) on Tax Deducted at Source (TDS) under proposed section 194-O of the Income Tax Act, 1961

In the Finance Act 2020, the Government has introduced new rules in Section 194-O which provides a withholding of TDS by e-commerce companies for facilitating sale of goods and services of e-commerce participants through its marketplace. These rules are effective October 1, 2020.

  1. What does TDS on e-commerce transactions mean?

An e-commerce operator will be required to withhold and deposit to the Government a % of the gross sales of products/ services by sellers on the marketplace. This withholding is not applicable for offline sales by sellers.

  1. What is the TDS %?

The TDS % on the gross sales of products/ services is 1% (0.75% for FY 2020-21 applicable till March 31, 2021). In case no Permanent Account Number (‘PAN’) or Aadhaar is provided by the seller or where the PAN is inoperative, the rate increases to 5%.

  1. Are any online sellers excluded from the TDS?

There is an exclusion for Individuals and Hindu Undivided Sellers (HUFs) where the gross sales of the product or service during the financial year is less than INR 500,000 and PAN or Aadhaar is provided.

  1. What is the effective date of the TDS provisions?

The rules are applicable from October 1, 2020.

  1. Whether the TDS will apply on a net sales i.e. after considering sales returns and GST?

The current rules propose that TDS will apply on the gross amount of sales from goods or services. If any further clarification from Government is received on this point, we will update this response.

  1. What proof of TDS deduction will be provided to the seller?

Similar to existing TDS provisions, we understand that Sellers will be able to check the TDS in their Form 26AS at https://incometaxindiaefiling.gov.in. and also use the “View Your Tax Credit” facility available at www.incometaxindia.gov.in. If we receive clarification on this point, we will update this response.

  1. How can the seller claim credit or refund for the TDS deducted?

The seller can claim credit or refund for the TDS deducted by filing an income tax return for that financial year, as per their applicable due dates. Sellers may consult their respective tax advisors for the same.

  1. Is linking of PAN with Aadhaar mandatory for Individuals?

Linking of PAN with Aadhaar is mandatory per the Government for Individuals, this is required to be done by March 31, 2021. Not linking the same will make the PAN inoperative from April 1, 2021 onwards. The rate of TDS for inoperative PANs is covered in FAQ #2.

  1. How can I link the PAN and Aadhaar?

To link the PAN and Aadhaar, please visit https://www1.incometaxindiaefiling.gov.in/e-FilingGS/Services/LinkAadhaarHome.html.

Enter details of PAN, Aadhaar Number and Name as per Aadhaar and follow subsequent steps.

  1. What if the PAN status provided by NSDL does not match with PAN stats as per income Tax department?

Sellers can check PAN status as per below link provided by Income Tax department. If the status provided by below link doesn’t matches with status provided by NSDL, please reach out to the Income Tax Department to rectify the PAN details.

Income Tax department link: https://www1.incometaxindiaefiling.gov.in/e-FilingGS/Services/VerifyYourPanDeatils.html?lang=eng

NSDL link: https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp

+ - Tax Collected at Source (TCS) FAQ

Tax Collected At Source (TCS) under the GST Act

As per the GST Act, special provisions are introduced for taxation of e-commerce transactions, which inter-alia includes Tax Collection at Source (‘TCS’) by e-commerce operator in connection with goods and services supplied by sellers and service providers (‘Sellers’) on Caelum.in.

  1. What is collection of tax at source (‘TCS’)?
  • As per the GST provision, e-commerce operator (Caelum) collecting consideration with respect to taxable online sales made by the seller on the marketplace is required to collect an amount at the rate of 1% ( SGST % and CGST – 0.5% or IGST – 1%) on the net value of taxable sales. The amount so collected is called as TCS which is required to be remitted by e-commerce operator to the government on monthly basis. The seller will be able to utilize the TCS credit to offset their output tax liabilities.
  • In terms of the Government notification, TCS provision will be effective from October 1, 2018.
  • Net value of taxable supplies of goods and services = value of goods sold by the Seller during the month on which GST is payable less sales returns.
  1. What is the percentage of TCS?

The rate of TCS is notified by the Government as 1% (SGST % and CGST – 0.5% or IGST – 1%)

  1. Is TCS applicable only on sales above a specific threshold?

There is no threshold limit prescribed for TCS compliance and it will be applicable to all online sellers selling taxable products

  1. By when will the TCS amount be available for sellers to claim it?

Caelum will report details of TCS collected in GSTR- 8 by 10th of the following month. Credit of TCS amount will reflect in Seller’s GST electronic cash ledger. The amount can be utilized for discharging output GST liability, interest, penalty, fees or any other amount payable.

  1. Will TCS be collected on COD orders?

Yes, TCS will be applicable even when the payment mode is Cash on Delivery (COD).

  1. Whether registration is mandatory and whether TCS will be collected?

Sellers supplying taxable goods and services through the marketplace will be required to compulsorily obtain GST registration with regular dealer status irrespective of the sales threshold. Therefore, Caelum will collect TCS on the net taxable supplies made by such seller on the marketplace.

  1. Do Sellers need to undertake any additional compliance for claiming TCS credit?
  •  Seller need to ensure that their GSTIN ID is correctly updated with Caelum.
  • The details of the TCS collected would be reflected in sellers GST portal. For verifying the TCS credit at your GST portal: Login –> Select month –> Click on “TDS and TCS credit received” –> Click on ‘TCS credit received’ –> Select GSTIN wise TCS details and accept –> Accept the declaration and proceed to file –> File TCS credit received summary –> Check for balance in electronic cash ledger.
  • Once the transaction is accepted, TCS credit will be reflected in electronic cash ledger at seller GST portal.
  1. How TCS mechanism works in case of sales return /Customer returns?
  • Caelum is required to collect TCS on the ‘net taxable value’ of supplies made by the Seller through an e-commerce marketplace.
  • Net taxable value is arrived at after reducing the aggregate value of taxable supplies returned to the Seller.
  • Thus, amount of TCS for a particular month would be collected only after adjusting the returns made during the month.
  • Following is an illustration of amount of TCS that shall be collected per month by Caelum after considering supply returns:

 

ParticularsAmount (in INR)
(A) Value of goods/ services invoiced to customer for the month50,000
(B) Value of goods/ services returned by customer during the month(15,000)
(C) Net taxable value on which TCS needs to be undertaken35,000
(D) TCS to be deposited by Caelum to the government (1% of (C))350
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