India's New E-commerce Tax Regulations for Composition Taxpayers and Unregistered Individuals ( August 9, 2023 )

Regulator CBIC has introduced new e-commerce tax rules in India, affecting composition taxpayers and unregistered individuals. These involve specialized e-commerce procedures for goods supplies and aim to improve tax transparency and compliant behavior.

E-commerce operators in India must collect TCS for composition taxpayers, while unregistered individuals will require enrolment numbers before supplying goods. These measures, effective from October 1, 2023, support small businesses. Businesses should prepare for the changes and seek professional advice for a smooth transition.

India’s Central Board of Indirect Taxes and Customs (CBIC) has issued two significant notifications, dated August 4, 2023, namely Notification No. 36/2023-Central Tax and Notification No. 37/2023-Central Tax.

These notifications introduce a specialized procedure for e-commerce operators concerning the supply of goods by composition taxpayers and unregistered individuals. They aim to simplify tax compliance, enhance transparency, and support the growth of small and medium (SME) businesses.

As the effective date of these changes—October 1, 2023—draws near, it is advisable for businesses to familiarize themselves with the alterations and consider seeking professional advice to ensure a seamless transition to the new protocols.