New GST rules for shared warehouses on anvil

New Delhi: GST authorities are working out a mechanism to deal with the taxation and registration issues related to shared warehouses maintained by e-commerce companies, where multiple suppliers store their goods for the last mile delivery, an official said. The issue of taxation for warehouses has cropped up after multiple suppliers have geo-tagged the same warehouse as their ‘additional place of business’ under the Goods and Services Tax (GST) rules. “We are working to see whether a ‘shared workplace’ or ‘coworking space’ concept can be implemented for the warehouses maintained by e-commerce companies to store goods of multiple suppliers,” the official told.

Under Goods and Services Tax (GST) law, suppliers to an e-commerce platform can store their goods at a common warehouse. However, the suppliers in their GST registration are required to show the warehouse as an additional place of business. The official said that when multiple taxpayers register at a single warehouse, the geo-tag reflects the same address for all. This sends a signal to the tax officer that numerous taxpayers are based at one location and this might be a possible fraudulent registration. The other issue is that the warehouse where multiple suppliers store their goods should not be held accountable for the default of a single supplier. Additionally, there is a risk that tax officers might attribute such risks to the e-commerce operators themselves, potentially affecting their businesses, the official added.