Let’s say a seller lists an item of value 1,00,000 on an e-commerce website. The website adds a processing fee of 5% to the buyer and takes a commission of 10% from the seller. What will the buyer be charged 1,00,000 + 5,000 (processing fee) + 18,900 (18% GST) = 1,23,900 ? Is the above understanding correct ? Does the ecommerce website charge 18% GST to the buyer ?(Amazon adds GST to all products during checkout) Next, how much tax does the ecommerce operator give to the government ? And how much does it send to the seller ? How are these calculated ?
There are 2 transactions which are being done.
1. Selling of product and 2. processing fee of E-commerce operator.
Seller will pay GST on his product value of Rs. 100000 and E-commerce will pay GST on it's fees.
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Can you confirm the breakdown of charges here for a hypothetical e-commerce website ? Let’s say item price is 1,00,000. The website also charges a buyer website fee of 5% from buyer in addition to item price. • Here, the buyer will be charged as below ? • 1,00,000 (item price)+ 5,000 (5% buyer website fee) + 18% gst = 1,18,000 + 5,900 = 1,23,900 ? • Let’s also say the website takes a seller commission of 10%. It should only apply seller commission on item price and not buyer website fee ? • What amount does it send to seller ? • 1,23,900 - 5,900 (buyer website fee) = 1,18,000 • 1,18,000 - 11,800 (10% seller commission) - 2,124 (18% gst on seller commission) = 1,04,076 • 1,04,076 - 1,040.76 (1% gst for tcs) = 1,03,035.24 (final amount to seller) • What tax does e-commerce website pay ? • 900 (18% gst on buyer website fee) + 2,124 (18% gst on commission) + 1,040.76 (1% gst). Please correct me if I’m mistaken.
Buyer will be charged GST on Total payment of goods i.e. Rs,. 1,00,000/- in given case + processing Fees and GST thereon so it will be Rs. 1,23,900/- (Rs. 1,05,000 /- Basic + Rs. 18,900/- GST)
The amount transfer to seller will be
Item Value Rs. 1,18,000 (Rs. 1,00,000 + GST Rs. 18,000)
Less :-
Commission Rs. 11,800 (Rs. 10,000/- + GST Rs. 1,800) - Commission is always on basic value not on GST
Net Amount Rs. 1,06,200/- pay to Seller
E commerce website pay to government GST of Rs. 18,900/- as collected from customer + Rs. 1,800/- collected from seller and can get GST Credit of Rs. 18,000/- as paid to seller. So net GST Liability of Rs. 2,700/-) which is typically GST on processing fees + Commission.
Hello,
In this particular scenario, the calculation of GST (Goods and Services Tax) involves several components:
The Buyer's Payment:
Amount Transferred to the Seller:
Thus, the net amount paid to the seller is Rs. 1,06,200/-.
GST Compliance:
The e-commerce website is responsible for:
Additionally, the e-commerce website can claim a GST credit of Rs. 18,000/-, as this amount was paid to the seller.
Consequently, the net GST liability for the e-commerce website is Rs. 2,700/-. This liability typically represents the GST on processing fees and commission.
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