As per the VAT laws, an e-commerce operator is liable to collect 5% of the consideration paid to suppliers for supplies made through e-commerce marketplace. Therefore, consideration received for supplies through the e-commerce marketplace will be after deducting the requisite 5% of value of supply.

However, credit of VAT is available to the seller in his cash ledger on accepting the supplies declared by the e-commerce operator on the VAT portal.

Thereafter, such amount will reflect as VAT credit in the electronic cash ledger and can be used for discharge of output VAT liability.

In case of excess balance of VAT in cash ledger, the same can be claimed as refund from the

What is the rate of VAT notified by Government ?

As per VAT norms, E-commerce operator ( Ecommerce Private Limited) has to withhold VAT 5% of Net Value of Taxable sales from sellers for any given online sale on |Platform and have to remit the same to Government on monthly basis. Rate of VAT is 5% under each Act. VAT provision require an e-commerce operator like to collect tax at source (VAT) at the rate of 5% will be deducted on taxable value of an order from the seller payout as per below rule. In case of Inter-state supplies = 5% VAT will be deducted against taxable supplies only but not on non-taxable supplies. would be responsible for filing the electronic statement giving the details of outward supplies and returned goods/services made by such sellers along with the VAT amount collected on the consideration received by such sellers.

What is meant by “net value of taxable supplies” ?

The “net value of taxable supplies” means the aggregate value of taxable supplies of goods or services or both, other than the services on which entire tax is payable by the e-commerce operator, made during any month by registered supplier through such operator reduced by the aggregate value of taxable supplies returned to such supplier during the said month. Net value of Supplies means = Total taxable supply of goods or service in Total taxable supply of goods or services returned to the seller during the said month, ignoring any negative amount in case of sales return is more than sales for the tax period.

How to calculate taxable value of an order?

Taxable Value = Selling Price – VAT – Sellers share of discount

What Percentage amount will the VAT be deducted by ?

As per VAT norms, is liable to collect VAT 1% of Taxable Transaction Value from sellers for any given sale on and have to remit the same to Government. * In case of Intra-state supplies = 0.5% SVAT and 0.5% CVAT and * In case of Inter-state supplies = 1% IVAT will collect VAT on the sales amount (exclusive of taxes) to be paid to the seller.

How can you avail the VAT credit?

VAT deposited by will reflect in the cash ledger of the seller on the basis of ’s Filing. VAT in the cash ledger shall be eligible for utilization against tax liability in respect to the seller’s supplies.

How will VAT mechanism work in case of sales returns on ?

under VAT regime is required to collect VAT on the net taxable value of sale made by respective sellers. Hence, would collect taxes on net value, calculated by reducing sales returns from gross value of sales. Net Value of taxable supplies of goods and services = Value of goods or services sold by the seller during the month on which VAT is payable – Sales Returns

How to match the VAT uploaded by E-commerce Operator with the sales of sellers?

Details of the amount collected by are furnished in its statement of account. Details of supplies are mentioned in Statement of account. This details seller has to match with the corresponding details furnished by the concerned seller official return for the same or any preceding calendar month. If details of tax collected by and furnished in statement of account does not match with the sellers, the discrepancy shall be communicated to both and the seller. If the discrepancy isn’t rectified by the seller in sellers valid return, the value of such supply shall be added to the output liability of the seller for the calendar month succeeding the calendar month in which the discrepancy is communicated. The sellers shall be liable to pay the tax in respect to such supply along with interest, at the rate specified on the amount so added from the date such tax was due till the date of its payment, whatever interest and penalty is levied by government is liability of the seller and will deduct that amount from the seller statement of account.

Will VAT be collected even if supply of goods or service is exempt or not subject to VAT?

No, VAT will be collected only on taxable supplies. If goods or services sold on the marketplace are not subject to VAT, VAT will not be collected.

By when will deposit the VAT amount to appropriate government authority?

The amount collected by the E-commerce operator is to be paid to appropriate government within 10 days after the end of the month in which the said amount was so collected.

How can seller claim credit of VAT?

The amount of VAT deposited by the E-commerce operator with the appropriate government authority will be reflected in the electronic cash ledger of the actual registered seller (on whose account such collection has been made) on the basis of the statement file by the e-commerce operator in FORM VATR-8. The said credit can be used at the time of discharge of tax liability by the seller. will report details of VAT collected in VATR-8 by 10th of the following month. Credit of VAT amount will reflect in seller’s VAT Electronic Cash Ledger. The amount can be utilized for VAT ouput liability, interest, penalty, fees or any other amount payable as per government rules time to time.

Will VAT be collected even if payment terms is COD?

Yes, VAT will be applicable for payment mode Cash on Delivery (COD) as well.

Whether registration is mandatory and whether VAT will be collected?

Sellers supplying taxable goods and services through the marketplace will be required to compulsorily obtain VAT registration with regular dealer status irrespective of the sales threshold. Therefore, will collect VAT on net taxable supplies made by such seller on the marketplace.

Can composition taxpayer make supplies through e-commerce operator?

No, position taxpayer cannot make supplies through e-commerce operator.