New Delhi, May 21 (KNN) The Goods and Services Tax (GST) authorities are working on a mechanism to address taxation and registration challenges related to shared warehouses maintained by e-commerce firms, where multiple suppliers store goods for last-mile delivery, an official said.

The issue arose after multiple suppliers geo-tagged the same warehouse as their 'additional place of business' under GST rules.

When numerous taxpayers register at a single location, it raises red flags for tax officials who may suspect fraudulent registrations.

"We are looking at whether a 'shared workplace' or 'coworking space' concept can be implemented for e-commerce warehouses storing goods of multiple suppliers," a GST official told PTI.

Under GST law, suppliers to e-commerce platforms can store goods at a common warehouse but must list it as an additional place of business in their registration. However, this results in the same geo-tag for multiple taxpayers at one address.

Officials are concerned that warehouses with many suppliers should not be penalised for the default of one.

There are also fears that tax officers could wrongly target e-commerce operators over such warehouses, impacting their business.

The issue was discussed at a recent meeting of central and state GST officers. "It is currently under discussion whether a shared workplace model can be adopted for e-commerce warehouses.

This would be examined by the law committee and then put before the GST Council," the official said.

Tax experts say the evolution of e-commerce has necessitated shared warehouses housing thousands of suppliers. Geo-tagging raises scrutiny risks despite these being legitimate facilities.

"GST authorities should implement a mechanism to separately identify warehouses and train systems to avoid conflating their tax standing with that of suppliers registered there," said Rajat Mohan, Executive Director at Moore Singhi.

(KNN Bureau)