Looks like Amazon India will start suspending seller accounts if they haven’t yet updated their Goods and Services Tax Identification Number (GSTIN). (Hat-tip: Shashikant Kore) It’s not clear if sellers have been given a specific deadline to update GSTIN or not. We’ve written to Amazon to confirm if there is a deadline, and will update when we hear back from them.
The Goods and Services Tax (GST) went live on July 1. Now every online vendor has to register for it and obtain a statewise Permanent Account Number (PAN) based 15-digit GSTIN, for the purpose of paying tax. This needs to be updated with every e-commerce marketplace they sell on, because the marketplaces in turn have been mandated to collect up to 1% tax on all sales made by online sellers on their respective platforms, under Section 52 of the Goods and Services Tax Act, 2017. Note that last month, the government had temporarily put on hold the implementation of Section 52, saying that the decision was made based on “the feedback received from the trade and industry.” The government also said that the date when this will be enforced will be communicated later, but didn’t provide an indication regarding when that might be.
However, what is interesting here is that in the same notification, the government had also mentioned that online sellers will not have to register immediately for GST, at least not “till the provision of Tax Collection at Source is brought under force,” except those that are “liable under Section 22 or any other category specified under Section 24” of the GST Act, then they will have to register right away.
Section 22 of GST Act states:
22. (1) Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees:
Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees.
While the pertinent portions of Section 24 of GST Act are:
24. Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act:
(i) persons making any inter-State taxable supply;
(ix) persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52;
Read all provisions under Section 22 and 24 here.
Amazon isn’t the only e-commerce platform to make such a move. Paytm Mall has also modified its seller onboarding process and has made it mandatory for sellers to undergo strict quality and service audits, including providing their registration number, shop location, shop photos and GSTIN among others before listing their products on Paytm Mall. This change in guidelines has resulted in over 85,000 existing sellers being delisted from the platform.
Delay in issuing GSTIN
In a notification dated July 7, the government had informed that:
After generation of Application Reference Number (ARN), the Registration Certificate (RC) containing GSTIN will be issued after 3 working days, unless approved earlier by Tax Officer.
This was backed up by the Ministry of Finance:
Process of issue of GSTIN is started in case of taxpayers who have already been issued provisional ID for registration(PID) & new taxpayers.
— Ministry of Finance (@FinMinIndia) July 8, 2017
However, a number of sellers have complained that they are yet to receive GSTIN, several days after the 3 day deadline:
@askGST_GoI Our ARN is AA270717159957C.Applied for GST registration.GSTIN not yet granted even on on deemed basis. 8 days elapsed. Pl allot.
— KRISHNAMURTHY RAMAMO (@kribharam) July 17, 2017
@askGSTech Intimation For GSTIN not received against of ARN AA240717087547O. On login shows u had allotted GSTIN.
— Sanjay Agrawal (@sanjay_370) July 17, 2017
@askGST_GoI ARN Number not yet received even after 20 Days GSTIN 07AAGCC9762L1Z2
— CA SANKET AGARWAL (@fcasanket) July 17, 2017
— Ruchit Mehrotra (@iamruchit_m) July 15, 2017
@CBEC_India as per GST notification on 6.7.17 GSTIN will be granted in 3 days but is have not received for one of my application for 17 days
— Kalpesh Laddha (@kpladdha) July 17, 2017
It’s also worth noting that while online GST registration began on June 25, on Day One there were several reports of traders and small businesses facing technical glitches on the site.
Amazon can’t really be blamed for asking sellers on its platform to update their GSTIN at the earliest, because the government hasn’t provided any clear indication as to when Section 52 might be enforced. Amazon clearly doesn’t want to take a chance, given that it has committed to investing $5 billion in India. From the sellers point of view, they might genuinely not have received GSTIN yet and hence have failed to update the same. They should communicate these delays to Amazon and prevent suspension of their account. We have reached out to All India Online Vendors Association (AIOVA), one of the several bodies that represent online sellers in the country, to find out more about the issues they’re facing regarding GSTIN.