There are certain thresholds that exist that determine whether one has to register themselves under the GST scheme or not. This is the reason why small businesses can avoid paying GST. Since Amazon sellers are e-commerce sellers, it is compulsory for them to register themselves under the GST scheme and pay GST. They will also have to file their tax returns monthly.
GST has completely changed the way that we look at the tax situation in India. It is a scheme that was recently introduced in India that subsumed all of the indirect taxes that were present and made them a single tax. It is now much easier to pay taxes and businesses do not have to face the difficulties that they did before. The online GST registration procedure makes it much easier for businesses to register themselves under the scheme without having to run around from building to building like before.
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Impact of GST on Amazon sellers
GST has had a huge impact on e-commerce operators like Amazon sellers. These are some of the ways in which the GST scheme has impacted them:
Simplicity in filing returns
Amazon sellers have to follow the online GST procedure of filing which is something that has definitely positively impacted the lives of e-commerce operators. They are accountable to a 2% reduction in their total sales value. According to the GST scheme, an Amazon seller should get the amount at 1% of the total value of the supplies. This provides the government with the opportunity to effectively track down e-commerce businesses.
There is a form called GSTR-1 which is submitted every month. After this is done, the Amazon seller will receive another form called GSTR-2 which is complete with all the details of the taxes that have been charged by the e-commerce marketplace. After a thorough review, the sellers can return this form. This will lead to a 20% reduction in the costs of operation and logistics. This will motivate more vendors to keep their product warehouses at excellent locations where they will have optimum operability.
Reduction in fraudulent activities
With the introduction of the GST scheme, it has become much easier to ensure that fraudulent activities are not as prevalent as they once were. As mentioned before, it is mandatory that all Amazon sellers register themselves under the GST scheme irrespective of how much money they make. At the close of the financial month, the supplier and Amazon sellers should both produce a report with the same sales value, that has been properly balanced.
This is to ensure that sellers cannot manipulate the sales data and get away with it. In case there is a difference between the values that have been provided by the seller and supplier, the difference in the values will be added to the supplier’s revenue.
Powerful reach
The GST scheme has empowered smaller e-commerce operators and allowed them to have a level playing field with much larger companies. Before the introduction of the scheme, most e-commerce sellers usually maintained their operations within a single state. They did this in order to prevent paying unnecessary taxes for having their businesses operating in many states.
The subsuming of numerous taxes into a single one that could be used all across the country made things much easier for them. The taxation schemes for the transport of goods between states were done away with making it much easier for e-commerce operators to satisfy the needs of their customers with this new unified tax scheme. This also provided them with the opportunity to get to customers all across the country with much greater simplicity. E-commerce sellers were now in a position where they were able to provide their customers with what they needed in a more efficient way.
Improved tax credits
Input tax credits can be used by Amazon sellers to reduce their tax payments. Using the facility of Input Tax Credit(ITC) can help e-commerce sellers reduce the tax that they had already paid for their raw materials. ITC can only be claimed for goods and services since it comes under the GST scheme. In order to utilise ITC, the e-commerce sellers will have to give a proper explanation of how their goods and services are being marketed.
ITC can only be claimed for business purposes and cannot be used for personal purposes. The Amazon seller must file the appropriate tax statement online containing all the information that they need to present regarding their taxes.
Obtaining refunds
In India, most customers prefer to use the option of “cash on delivery” as this allows them to return their orders in case they are not satisfied with them and get their money back. There is a high percentage of cancellation orders in India. When orders are cancelled and refunds are requested by customers, there is always some confusion regarding the taxes that have been already paid for the product.
Since the tax has already been deducted for the returned orders, it can be cumbersome for sellers to get the refunds. This may lead to a higher compliance cost(cost associated with adhering to the industry regulations) for the Amazon seller.
Steps to register under the GST scheme for e-commerce operators
These are the steps that e-commerce operators have to follow in order to register themselves under the GST scheme:
- The seller has to complete the REG-07 E-application form on the online portal.
- They then have to sign the application form and get it verified using an Electronic Verification Code(EVC).
- The form should then be submitted to the necessary centre.
- The officer in charge of the registration will provide it after verifying the application form.
- A certificate of registration will be provided(REG-06) within a period of 3 days after the application has been successfully submitted.
Tax Collected at Source(TCS)
E-commerce operators like Amazon have to collect a tax of 1% from those who are selling their products on their platform. It is important that this concept is understood by sellers on Amazon. The following example will help you understand the concept of TCS:
Imagine that an Amazon seller has displayed one of their products on the Amazon platform for Rs 2000. Someone then purchases this product from Amazon for Rs 2000. The seller will now have a tax liability of Rs 360(since the GST rate is usually 18%). When Amazon is paying the seller who used their platform to sell their product, they will deduct a TCS of 1% from the base value of the product(1% of Rs 1640 is Rs 16.4). The seller will then have to pay the remaining tax value of Rs 343.6 to the GST department.
Role of InstaSpaces
InstaSpaces is one of the leading virtual office providers in India and has a solid reputation for satisfying the needs of its clients. InstaSpaces provides virtual offices all across India and also provides additional facilities like meeting rooms and training rooms. Virtual administrative assistants can also be availed for dealing with clients and handling requests on behalf of the business.
We also register businesses officially and also register them under the GST scheme. We are highly experienced at what we do and have helped many businesses get themselves successfully registered. We charge all of these services at affordable prices and we will help you with whatever you need according to your budget.
We will help you get your business registered under the GST scheme with complete compliance with all the rules and regulations. Assistance will definitely be provided when it comes to documentation and you will have not to worry about forgetting anything that you need because we will be on it. If your business is available in multiple states, we will help you get it registered under the GST scheme in all of them. We have an excellent pricing scheme when it comes to this. We guarantee a complete refund in case the registration for your business turns out to be unsuccessful.
We have a fantastic team that will dedicate itself completely to you and that will ensure that your needs are met. We believe in the importance of committing to what we do and making sure that it gets done in the right way according to the customer. We started out as a group of people who wanted to make a positive change in the lives of those around us and are so grateful that we get to do what we do.
In case you have any queries, you can always reach out to us on our website where our virtual assistant will be more than happy to help you out. We cannot wait to get to work with you and we hope that you feel the same way. Though the entire GST registration process may seem intimidating to you since you may not have done it before, we will walk you through it and ensure that you get what you need. Put your complete trust in us and we will do our best to make you not regret seeking out our services.
Phone:- +91–888-270-2020
Email:- [email protected]
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