This presentation briefly gives an overview of the implications of GST on E Comm Operator and Job Work. Kindly follow me for the latest update on the topic.

1. Goods And Service Tax
Presented by:
CA. Saumil J. Kapadia
Topic forToday’s discussion: Job Work / E – Commerce

2. Sources & Credits:
1. ICAI – IDT Committee
2. WIRC and IDT Study Group
3. ICAITV
4. GST related websites
5. Webinar ofTally Solutions Pvt. Ltd.
6. Study Circle meetings
7. Seniors in the Profession
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3. Disclaimer
These are our personal views and can not be construed to be the
views of the ICAI or our firm.
These views do not and shall not be considered as a professional
advice.
This presentation should not be reproduced in part or in whole, in
any manner or form, without our written permission.
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4. DiscussionTopic
 Definitions
 Job Work
 E-Commerce
 Compliance for E-Commerce Operators
(TCS)
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5. Definitions:
 2(49) “goods’’ means every kind of movable property other than
money and securities but includes actionable claim, growing crops,
grass and things attached to or forming part of the land which are
agreed to be severed before supply or under a contract of supply;
 2(61) “job work” means undertaking any treatment or process by a
person on goods belonging to another registered taxable person
(RTP) and the expression “job worker” shall be construed
accordingly;
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Definitions:
 2(5) “agent” means a person, including a factor, broker, commission
agent, arhatia, del credere agent, an auctioneer or any other mercantile
agent, by whatever name called, who carries on the business of supply or
receipt of goods or services on behalf of another, whether disclosed or not;
 2(41) ‘electronic commerce’ means supply of goods and/or services
including digital products over digital or electronic network;
 2(42) ‘electronic commerce operator’ means any person who owns,
operates or manages digital or electronic facility or platform for electronic
commerce;

7. JOB WORK
 Meaning of ‘Principal’ for the purpose of Sec. 55(1),
Principal means a Registered Taxable Person (RTP)
sending taxable goods for job work.
 What is the treatment of Job Work?
As per Clause 3 of Sch II of the GST Law, any treatment or
process which is being applied to another person’s goods is
considered as Supply of Service.
 Whether the term ‘Job work’ includes works contract or not
???
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8. Privileges available to the principal and restrictions :
Privileges:
1. He shall be entitled for input tax credit on inputs and capital goods
sent to job worker
2. It is not necessary that the inputs and capital goods must be first
received by the principal in his own premises.
(Logistically very important, since principal can direct his supplier to deliver
the inputs and capital goods to job worker)
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Restrictions:
 Goods should be received back within the specified period:
Inputs – Within 1Year from their being sent out
Capital Goods – Within 3Year from their being sent out
 If inputs or capital goods sent for job work are not received back or
supplied in accordance with Sec. 55(1) within specified period, it shall be
deemed that such inputs had been supplied by the principal to the job-
worker on the day when said inputs/capital goods were sent out.
Imp.: Principal would be liable to pay interest for the intervening period.

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Supply of goods by the principal from the place of job worker:
 Goods may be supplied directly from the POB of job worker,
 Only when, Principal declares the POB of job worker as his additional
POB
Except where –
1. The job worker is registered under the GST Act; or
2. Principal is engaged in supply of notified goods
Sec. 55(5) Supply of Waste or scrap:
 This section brings Clarity as regards to tax liability of Waste & Scrap
 Any waste & scrap generated during the job work, may be supplied
either –
 If the job worker is registered under GST Act, by job worker directly
from his POB on payment of tax
 If the job worker is not registered under GST Act, by the Principal

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The above supply chain can be represented through the following graph:

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Whether a job worker is required to obtain registration ?
Yes, since the job worker is supplier of services, he would be required to obtain
registration if his aggregate turnover (excl. value of goods of principal) exceeds
threshold.
Whether goods, directly supplied from the job worker’s premises, will
be included in the aggregate turnover of job worker ?
As per Expl. 2 of Sch. V, supply of goods, after completion of job work, by a
registered job worker shall be treated as the supply of goods by the “principal”
referred in Sec 55, and the value of such goods shall not be included in the
aggregate turnover of the registered job worker.
Imp.: The above looks perfect till both the parties are registered but there is
no clarity about the fact that if any one of the party is an Unregistered Dealer

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E-Commerce

14. E-Commerce – Various Business Models
 Ownership Based Model (Inventory Based)
 Non Owner Based Model (Aggregator)
 Many Sellers – Many Buyers (Market Place)
 Consumer to Consumer Model (C-to-C)
 Information / Database RetrievalServices Model
 Or Any combination thereof of models as depicted above.
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15. E-Commerce – Sec. 56: Collection of TCS
 Section 8(4) provides that categories of services may be notified where tax
shall wholly be paid by e-commerce operators. All provisions of the GST law
shall apply to such e-commerce operators (ECO) as if such persons is liable to
pay tax
 Every e-commerce operator, not being an agent, has to collect 1% of net
value of taxable supplies where consideration is to be collected by the
operator
 Net value = aggregate value of goods/ services made during the month
[other than those notified u/s 8(4)] by all RTP through ECO less
Aggregate value of taxable supplies returned to the suppliers during
the month
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16. E-Commerce – Sec. 56: Collection of TCS
Compliances for e-commerce operators
 TCS to be paid to credit of appropriate government;
 To furnish a statement of such outward supplies of goods and / or
services, electronically
 Both payment and statement to be made / filed within 10 days from
the end of the month in which the collection is made (GSTR – 8)
 Statement to contain details of amounts collected, supplier-wise in
respect of all supplies effected through the website/portal of the e-
commerce operator during the calendar month:
Tax credit for the concerned supplier
 Amount remitted by e-commerce operator treated as tax paid by the
supplier (ITC)
 Supplier eligible to claim credit of the same in the electronic cash
ledger.
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17. E-Commerce – Sec. 56: Collection of TCS
Verification of the statement filed by the e-commerce operator
 details of the supplies furnished by the e-commerce operator to be
compared with corresponding outward supplies of the supplier;
 Discrepancies, if any, to be communicated to both
 Discrepancy, if not rectified by supplier, to be added to output
of supplier for the month succeeding the one in which the same
communicated. The liability shall be paid along with interest.
Additional powers to the tax office
 Any officer not below Joint Commissioner may call for details like
supplies of goods and / or services, stock of goods etc. from
through notice
 Details to be furnished within 15 working days from the date of
 For non-compliance, penalty of upto Rs. 25,000
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CA. Saumil J. Kapadia
B. Com., A.C.A. (ICAI), I.S.A. (ICAI),
e-mail: saumil.j.kapadia@gmail.com
+91 9769942112