GST authorities are developing a system to address tax and registration concerns related to shared warehouses used by e-commerce companies, where multiple suppliers store their goods for final delivery, an official stated.
For warehouses, the problem of taxation has arisen because multiple suppliers are geo-tagging the same warehouse as their ‘additional place of business’ under the GST regulations.
As per the officials, we are undertaking an assessment to see whether the shared workplace or coworking space concept could be implemented for the warehouses that e-commerce companies use to store goods from multiple suppliers.
The suppliers under the GST norms to an e-commerce platform could store their goods at a common warehouse. The suppliers in their GST registration needed to depict the warehouse as an additional business place.
At a single warehouse, when multiple taxpayers register, then the geo-tag shows that it address for all. The same sends a signal to the tax officer that various taxpayers are based at one location, and the same may be a bogus registration.
Warehouse does not liable for the default of a single supplier if multiple suppliers store their goods in it. Risk emerges that the tax officers may attribute these risks to the e-commerce functionality itself, affecting their businesses.
The problem of warehouse registration carried through e-commerce companies was discussed between the Central and state GST officers at a meeting before this month.
The same is true in the discussion phase. If the shared workplace idea could be executed for the e-commerce warehouses, it shall be discussed by the law committee and then shown before the GST Council.
Read Also: GST Impact on E-commerce Sector in India
Under the GST Council, the law committee consists of officers from central and state taxes.
The e-commerce evolution has required many firms to maintain shared warehouses for numerous suppliers, with certain facilities accommodating thousands of suppliers.
Geo-tagging has been implemented by the GST authorities, mandating the taxpayers to furnish the geo-tags for all the registered premises. The same permits the tax officers to pinpoint the registered taxpayer’s locations.
Ineffective scrutiny for both the assessees functioning in these warehouses and the companies handling them will be caused by a scenario of numerous assessees depicting identical addresses. The same shows an influential challenge that needs a resolution at the industry level.
To separately fetch the warehouses and train the tax systems to prevent conflating the tax payment score of such facilities with those of the suppliers registered there, the GST Council must acknowledge a procedure.
Geotags must be enabled in a refined tax system to separately represent warehouses and individual taxpayers, streamlining more precise risk assessments through the tax officers and reducing unnecessary harassment.
