Just like Job Work, ecommerce transactions also involve a different buy-sell arrangement, hence need special attention in GST Law. As per the section 52 of CGST Act 2017, a person who owns, operates or manages an E-commerce platform, is liable to collect taxes while making taxable sales on behalf of other suppliers of goods or services, through his online platform, and as such, the tax collected is known as TCS i.e. Tax Collected at Source. The provision for TCS was deferred multiple times since the implementation of GST before 1st October 2018 when it was made applicable by Notification 51/2018-Central Tax dated 13-9-2018
Let’s dig in deeper to the important aspects of GST TCS provision in India: Beginning with the definition of an ecom operator to penalties, this article will cover everything you want to know about TCSThe Operator
Any person or organisation owning, operating or managing an E-commerce platform, offering the online platform for taxable sales of goods and services owned by other suppliers is known as E-commerce operator.Applicability
The applicability for TCS collection depends upon the following 3 factors:
- The person applying is a registered E-commerce operator.
- Taxable sales procured by the operator on behalf of other suppliers (and not for self-owned supplies)
- A consideration in respect of such supplies is collected by the operator.
For the registration of the operator as a TCS collector, an application has to be filed in REG-07. Upon a thorough verification by an authorised officer, a registration certificate shall be issued in FORM GST REG-06 within a period of three working days from the date of submission of the application.The GST Rate
The E-commerce Operator is liable to collect tax @1% (i.e. 0.5% CGST and 0.5% SGST and 1% For IGST) of the net value of taxable sales made through the online platform by other suppliers. Due Date for TCS Deposit
A registered TCS collector has to deposit the collected amount within a span of 10 days after the end of the month for which the TCS had been collected.Returns
An E-commerce operator needs to file monthly as well as annual returns, which can be attained as follows:Monthly Returns
: The TCS collector is required to file a TCS return in form GSTR-8 within 10 days after the end of the given month. Annual Returns
: The e-commerce operator can file his annual returns via form GSTR 9B. The Annual return needs to be filed by 31st of December following the end of every financial year, wherein the e-commerce operator needs to provide reconciliation between financial accounting results and GST Returns. However, for the financial year 2017-2018, this provision of filing GSTR 9B is deferred.Credit Claim
Upon the filing of GSTR 8 by the E-commerce Operator, the claim credit shall automatically reflected in Supplier’s Electronic Cash Ledger, which the Supplier can claim and use it for payments of taxes while filing GSTR 3B. Supplier will also get the TCS details auto-populated in GSTR 2A form.Reconciliation
All suppliers need to reconcile the supplies reported by them in their GSTR 1 and the supplies details provided by e-commerce operators in their GSTR 8. Based on the auto-populated details available in GSTR 2A, supplier needs to match the gross sale value, sales returns value, net sale values and tax amounts with their details provided in GSTR 1.If there is any discrepancy in the value of supplies, the supplier will have to pay the differential amount of output tax along with interest.
For the standard procedures of TCS, click here
, while you may find other relevant notification here
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