The government's new tax regime, the Goods and Service Tax (GST) is in the process of rolling out, and is targeted for implementation starting July 1. For some of us, it's been a great chance to pick up a nice deal, as retailers don't want to forward inventory to the GST norms. Software companies are making money with GST compliance tools, with options ranging from startups to the big firms. One thing you might not have expected though is that if you're selling your old phone online, you might have to register for GST.
Online sales platform eBay has partnered with Cleartax to offer GST training to sellers, and it noted on its seller centre that every person who supplies goods through an e-commerce operator shall enrolled in GST, irrespective of the turnover. It states: "Basis current guidelines, every seller on www.ebay.in will require to have GST registration at the time of GST rollout." This includes individual sellers looking to resell one-off items like that phone or laptop you no longer need.
Gadgets 360 reached out to eBay to find out more, and the company sent the following written statement:
From July 1, 2017, all sellers on e-commerce platform need GST registration. We will review if there is any clarification from the Government regarding exemption for categories of goods and services or types of 'assesses.'
Does this apply to any online platform? For example, if you're selling your phone on OLX or Quikr, do you still have to register for GST, even though in those cases the payment is often made offline, in cash?
Most likely, but possibly not, seems to be the consensus. Neither company offered a response to our question about GST, however, a source in one informed Gadgets 360 that there is still some confusion about what will, and will not, be covered under the GST regime.
"We're still figuring it out, and once we have a clear picture, we'll be putting up guidances throughout the site to make sure that the sellers are all complying with the norms," our source explained, "and we'll implement it this week, before GST goes live. But right now, we're still trying to understand, because there are a lot of different categories, and it's a new norm that we don't want to take any wrong steps on."
"If you go and sell a phone on an e-commerce website which may be like a second hand phone," explained Preeti Khurana, a CA with ClearTax, "you may have to find out the transactional value and levy GST and deposit it with the government." On the other hand, selling that same phone offline would not fall under the purview of GST, she added, noting that only people with sales over Rs. 20 lakh would need to register if it's offline. This is what complicates things for sites where the transaction is not concluded online.
Given the confusion around GST, we'd suggest that if you've got any old gadgets you want to get rid of, then you should hold a 'pre-GST sale' of your own. Otherwise, looking at the state of things, it would probably be best to wait a couple of weeks and let people figure out what the best practices are, before taking on the hassle of registering for GST yourself.
A tax expert joined us to talk about the impact of GST on prices of gadgets and IT services in India on Orbital, our weekly technology podcast. You can subscribe to it via Apple Podcasts or RSS or just listen to this episode by hitting the play button below.