E Commerce Business

[Karuna Jaiswal]

I have a query for one of my client who are to set up new e commerce business.

They are like how Amazon provides e commerce aggregator.

1. Whether the commission is chargeable to Service Tax?

2. If they engage a Courier service whether the Service tax is eligible as CENVAT to be set off against the Service tax payable by on commission?

[KASTURI SETHI]

Dear Querist,

Point-wise reply is as under :-

1.Yes.

2. Yes. Subject to prove nexus between input service and output service in terms of Rule 2(l) (i) (ii) of Cenvat Credit Rules, 2004.

[Ganeshan Kalyani]

I agree with the views of Sri Kasturi Sir.

AI Summary

Service tax on e commerce commission is leviable; courier service tax may qualify as CENVAT credit subject to nexus.
Commission charged by an e commerce aggregator is taxable as Service Tax. Service tax paid on courier services engaged by the aggregator can be availed as CENVAT credit against the tax on commission, subject to proving the required nexus between the courier input service and the taxable output service under the Cenvat Credit Rules.