GST Officials are keeping an eye on the joint warehouses of e-commerce companies. Officials believe that tax evasion is possible under the guise of joint warehouse. Let us tell you that
Under the GST law, suppliers of goods to e-commerce platforms can store their goods in a common warehouse. However, suppliers are required to show the warehouse as an additional place of business in their GST registration. The official said that when multiple taxpayers register at the same warehouse, the ‘geo-tag’ assigns the same address to all. This gives an indication to the tax officer that multiple taxpayers are located in the same location and this could be a potentially fraudulent registration. The official said they are working on creating a system to deal with taxation and registration issues.
Addresses of several businessmen in the same warehouse
The issue of taxation of such warehouses has come to the fore after several suppliers declared the same warehouse as their ‘additional place of business’ under the Goods and Services Tax (GST) rules. “We are working on whether the concept of ‘shared workplace’ or ‘co-working space’ should be applied to warehouses built by e-commerce companies to store goods from multiple suppliers, the official said. Can or not?
Meeting held with GST officials
He said the second issue is that a warehouse where multiple suppliers keep their goods should not be held responsible for the default of any one supplier. Additionally, there is a risk that tax authorities may hold the e-commerce operators themselves responsible for such irregularities, which could impact their business. The issue of registration of warehouses built by e-commerce companies was discussed between central and state GST officials in a meeting earlier this month.
What to do now, not final
“It is still at the discussion stage,” the official said. Whether the shared workplace idea can be implemented for e-commerce warehouses will be discussed in the Law Committee and then placed before the GST Council.” The Law Committee under the GST Council includes central and state tax authorities. Are included. Rajat Mohan, executive director of audit and consultancy firm Moore Singhi, said that with the growth of e-commerce, many companies have come across the need to maintain shared warehouses for different suppliers. Such warehouses are serving thousands of suppliers.
solution needed quickly
GST authorities have recently implemented ‘geo-tagging’. Under this, taxpayers will be required to provide ‘geo-tag’ for all registered premises. This provides tax authorities with information about the exact locations of registered taxpayers. “The case of multiple taxpayers showing the same address could lead to investigations for both the taxpayers operating within these warehouses and the companies managing them,” Mohan said. This is an important challenge. There is a need to solve this at the industry level.
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