It's no more a secret that Indian Government (Ready Or Not) implemented GST from 1st of July 2017; The scope of article is not going to explain GST and if its right or wrong! But how to make your E-commerce web site ready for GST if you are selling your products and services online!
Though government of India claims it as One Nation One Tax in reality its 4 slabs of taxes (5%, 12%, 18% & 28%) depending on Item or Services you are offering / selling!
To define the scope of changes on your e-commerce website you also have to understand process (though very complex) one has to follow for getting GST READY! GST taxation system works on NO separate taxes state wise such as Octroi / VAT / Excise etc but one similar tax all across INDIA.
Though to make this possible government has to define each product / services and with GST they have incorporated HSN or HS (Harmonised Commodity Description and Coding System). For all services they have made it 18% (earlier it was 15% charged as Service Tax). So point is whether you selling product online or services (even your service has one tax slab rate) everyone has to refer HSN code on their Invoice.
The whole GST been explained as a system which will be working under the principal of set-off. This way Manufacturer, traders, business owners who are buying for further selling will get setoff to their GST provided they been registered and procured GSTN (GST Number)
As a seller you have to ask buyer for their GSTN if they don't have one you have to keep it blank and it goes as un-registered buyer and tax goes to government; if buyer give you GSTN you have to clearly mention on the Invoice just like VAT / CST Number.
The main point of GST is there is no manual interaction and the system will work ONLINE on GST portal; As a seller of product or services it will be your responsibility to upload details of Invoice Number with date, client name, GSTN, Amount charged and GST bifurcation. Based on this upload system will give setoff automatically to your client provided they have provided GSTN to you.
The rule also suggest you to bifurcate tax to state government as well as central government provided your client is from the same state where you are offering your product or services; if not you have to refer complete GST to central government.
This way you have to refer bifurcation as
- CGST (The GST levied on the intra-State supply of goods or services by the Centre is Central GST (CGST)
- SGST - and that by the States is State GST (SGST).
- IGST - On inter-state supply of goods and services, Integrated GST (IGST) levied by central government
By this article I am not trying to repeat the GST procedure but each point is connecting to scope of changes you have to make on your e-commerce website. Refer summary below :
- Adding product on your E-commerce website with HSN code and tax rate for the same
- Requesting More Information – GSTN of client, State of product delivery or where services been offered as you have to bifurcate GST as CGST / SGST OR IGST.
- Provision to export this data in a format suggested by GST portal this way you don't have to do entry 2 times
- If you are using popular accounting software check with them if they offer API this way as soon as you make sales online data been sent to your accounting software
Many small to medium e-commerce site stoped offering their product during end of June & beginning of July referring a note “We are Getting Ready” for GST; but matter of fact one has to understand GST compliance and get it implemented on the website. With this I am sure you now know basics of making your online Business GST ready!
