GST on sale of used goods online: Relief for Quikr, OLX, no 1 pct levy imposed

By: and | Published: July 20, 2017 4:47 AM

Consumers selling their products on online portals like Quikr and OLX won't be subjected to 1% tax collected at source under the Goods and Services tax regime, which came into force from July 1, tax officials told FE.

Quikr, OLX, GSTUnlike large e-commerce companies where the seller on the platform is usually a small and medium size entrepreneur, on C2C websites, the goods sold are largely second hand by individual sellers.

Consumers selling their products on online portals like Quikr and OLX won’t be subjected to 1% tax collected at source under the Goods and Services tax regime, which came into force from July 1, tax officials told FE.

This basically means that if consumers (people not engaged in selling and buying as trade) sell their old products on online portals, the latter will pay them the full amount and not deduct the 1% TCS. Consumers have been exempted from this tax because it is not their business activity.

“GST deals with supplies in the course or furtherance of business and therefore unless selling is not somebody’s business, GST will not apply to sales made by him. Recently, in a clarification, the central government stated that sale of second hand jewellery from a consumer to the jeweller is not in the course of business. Similarly, if I sell my used furniture, it will not be treated as in course and furtherance of business,” Ritvik Pandey, commissioner for commercial taxes (CCT), Karnataka told FE in reply to an email query.

Pandey is part of the two-member working group under GST, incharge of e-commerce sector. Unlike large e-commerce companies where the seller on the platform is usually a small and medium size entrepreneur, on C2C websites, the goods sold are largely second hand by individual sellers. These goods range from furniture to electronic items besides other household products.

According to industry body, Internet & Mobile Association of India (IAMAI), this move will benefit the C2C online commerce services as portals helping customers sell second-hand items online are fast emerging as popular services under e-commerce.

“This decision will also help boost ‘sharing economy’ in India, helping optimal utilisation of resources and reducing waste of valuable assets lying idle. Sharing economy is a fast emerging global trend, and the recent vision document by MeiTy on developing a $1 trillion digital economy also envisages sharing economy to contribute $30billion by 2025,” said an IAMAI spokesperson.

Last month, large e-commerce companies including Amazon, Flipkart and Snapdeal received a temporary relief from the government, with the latter putting on hold a provision to deduct a 1% TCS, until further notification.

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