E-commerce refers to any transaction that involves the supply of goods or services through digital media such as internet websites, mobile applications or any other electronic network.
• Supply of Goods or Services
For VAT to be applicable to any e-commerce transaction, there shall be a taxable supply of goods or services. It is interesting to know that we inadvertently avail a lot of e-commerce services in our daily routines. Whether it be reading an online magazine, live streaming of a movie over the internet, use of distance learning applications, there are many such instances where these services fall under the regime of e-commerce.
• Place of Supply
In the case of sale of goods, place of supply is determined by the location of goods when supply happens and for the supply of services, the same is decided based on the location where the use and enjoyment of the service occur.
• Status of Supplier and Recipient
Residency status of supplier and registration status of the recipient also impact the VAT accounting treatments for any e-commerce transaction.
