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February 2023

E-Commerce: Media or Mediator of Supply

By Sunil Gabhawalla | Rishabh Singhvi | Parth Shah
Chartered Accountants
Reading Time 25 mins

INTRODUCTION

The internet revolution followed with the insurgence of mobility solutions has triggered an unprecedented growth in the e-commerce industry. Initially, emerging as a mere mediator of commercial transactions, e-commerce has now engulfed the entire traditional buy-sell and service delivery model into its wave. The start-up culture with its unconventional business models has further thrusted the steep degeneration of physical interface in commercial transactions. Moreover, with FDI limitations in multi-brand retail/ecommerce inventory trading, innovative techniques have crept into the transaction system. This has resulted in peculiar GST issues which are dealt with in the present article.

BUSINESS MODELS IN E-COMMERCE

E-commerce has been understood as buying and selling goods or services including digital products over digital or electronic network. The typical business models alive in the industry are:

Inventory Model: The operator owns and operates both the electronic platform as well as the inventory for supply of goods/services. He engages into a traditional buy-sell relationship with the end consumer (e.g. Brand Webstores).

Market Place Model: The FDI policy restriction has germina

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