If you run an eBay business out of India, the Goods and Services Tax (GST) affects your day-to-day operations. Since the GST law went live in July 2017, eBay has changed the rules for sellers on the platform. To make sure that your profits stay steady, it’s important to understand your responsibilities to both eBay and the government.
Do eBay Sellers Need to Register for GST?
If you live in India and you sell products on eBay, you are required to register for GST and pay taxes. This is true no matter what your annual revenue — under GST, all online retail businesses must file and pay tax each month. This is to help eBay stay compliant with the law. It also helps weed out sellers who are trying to avoid taxes. eBay controls this by asking you to add your GSTIN to your seller profile. If you do not, the company may hold your earnings until you comply. They can also turn off your listings and report you to the Indian government.
Effect of GST on Interstate eBay Sales
One of the biggest benefits of GST for eBay sellers is that it eliminates complicated state taxes. Before GST, many sellers avoided shipping to certain Indian states because of confusing and expensive taxes. Under the GST law, there’s one flat rate for all in-state and interstate sales. This means that when you sell a TV on eBay to someone in Delhi or Chennai, the tax rate is the same. As a seller, GST makes it easier to file taxes, reduce paperwork, and find more customers across India.
What Is the GST Rate for eBay Listings and Fees?
The GST for your eBay business changes based on the products you sell. There are several different GST rate slabs. Some of your listings, such as printed books, have a 0% GST. If you sell luxury items such as sunscreen and washing machines, you must pay 28% GST. The government has changed the rate slabs since GST was introduced in July 2017, and further changes are possible. It’s a good idea to check frequently to stay updated on the tax rates for your eBay listings.
You must also pay GST on eBay fees. This includes the regular transaction fees and special add-on services. If you pay eBay for a featured gallery, for example, you’ll also be charged tax.
How to Charge GST
When you sell on eBay, you must charge GST to your customers. To do so, you must adjust your listings to include the correct product category. That way, the tax is added to the purchase price. When you file monthly reports to the government, you must pay the GST that you charged.
Filing GST Invoices
As an online seller, the government of India requires you to file a GST return every month. With these returns, you need to submit invoices for every eBay sale that includes GST. eBay makes it easy to create the paperwork you need. To start, log in to your account, and go to the Account Balance page in your My PaisaPay area. From there, select the month you need, choose your GSTIN, and select “Invoice for Transactions incurring GSTIN”. With these documents, you can file online using the government’s GST portal.
If you have an eBay business, India’s GST law has significant benefits and several challenges. Once you master the process of editing your eBay listings and filing GST returns monthly, it’s easy to stay compliant.