The purpose of implementing TCS in GST can be inferred from its applicability to e-commerce operators. Actually, hundreds and thousands of small seller sell upon these e-trade platforms in today’s time. These e-commerce operators are trade giants who are traceable and it is easy to impose responsibility on them. Hence, the government made them accountable to collect a minimum amount in name of tax before transferring the proceeds to each of these sellers. This will help in tracking all those small sellers who otherwise would have been out of tax authorities reach. Also, to take the refund of tax so collected they would file timely returns and disclose business transactions which will also enhance the compliance procedure under GST framework.

Who is liable to Collect Tax at Source under GST?

E-Commerce Operators (not being an agent) are the specified category of the person, who is required to collect TCS under GST. Some common day to day examples of e-commerce operators around us are Amazon, Flipkart, Snapdeal etc.

Is there any threshold limit for Collecting Tax at Source?

The tax has to be collected irrespective of the amount involved in a transaction. Unlike TDS, there is no limit of ? 2.5 Lakhs.

Is it mandatory for E-commerce operators to get registered in GST?

Yes, every e-commerce operator has to get mandatory registration under Goods and Service Tax. Section 24(x) of CGST Act,2017 mandates the same irrespective of the value of supply made by such operator.

Can a supplier making supply through E-commerce operator avail threshold exemption?
The benefit of threshold exemption under GST can be better understood by categorizing suppliers as
Supplier of Goods
As per section 24(ix) of the CGST Act,2017 the supplier of goods shall take mandatory registration under GST. No matter how much is the amount of supply made, supplying goods through e-commerce platform requires registration.
Supplier of Services
A supplier of services can avail the benefit of threshold exemption. They are required to take registration if value of supply exceeds ? 20 Lakhs ( ? 10 Lakhs in case of the Noth Eastern States, excluding J&K). But, this benefit is not available to those covered under RCM as per Section 9(5) of CGST Act, 2017. Notification Number 65/2017 – Central Tax

Is separate registration for TCS is required by E-Commerce Operators?
Yes, even if an E-Commerce Operators already has a GSTIN, it would be required take separate registration for TCS.

Whether multiple registrations for TCS would be required by the E-Commerce Operator?
In case an operator makes interstate supply or intrastate supplies at multiple places, it would be required to take multiple registrations in each State / Union Territory where it is required to collect the tax. But, to facilitate the same there is an option to declare Head Office as its place of business for obtaining various registrations in different State / UT.

What is the applicability of TCS on foreign e-commerce operators selling in India?
If a registered supplier makes supply in India through a foreign e-commerce operator, such an operator is required to take mandatory registration. The main problem arising, in this case, would be no place of business in India. To resolve the same an agent in India can be appointed by such foreign e-commerce operator.

What rules do TCS deductors need to follow under GST?
Take mandatory GST registration – which is true both for persons making supplies through e-commerce operators as well as e-commerce operators themselves
Remit the TCS collected by the 10th day of the month succeeding the month in which TCS was collected and reported in GSTR 8
File an annual statement in the prescribed form by the 31st of December following the end of every financial year. The operator can rectify errors in the statements filed, if any, latest by the return to be filed for the month of September, following the end of every financial year. The details furnished by the operator in GSTR 8 shall be made available electronically to each of the suppliers in GSTR 2A after the due date of filing of GSTR 8
Furnish details of volume of goods / services supplied, stock of goods lying in warehouses or godown etc. whenever asked for, by an officer not below the rank of Deputy Commissioner, within a period of 15 working days. Failure to do so may fetch penalty up to INR 25,000

Does MMT, Goibibo and alike E-Commerce operators have to collect tax?
Liability to collect TCS is on e commerce operator who is finally rendering money to the actual supplier. In this case there are two possibilities
If MMT, Goibibo, Yatra etc directly pay amount to concerned hotel etc they should collect tax at source but,
If they operate through some other E- commerce operator who finally gives amount of consideration to supplier than that second e-commerce operator shall collect tax in this case.

How can the Supplier claim benefit of TCS under GST?
The tax collected by the operator shall be credited to the electronic cash ledger of the supplier who has supplied the goods/services through the operator. The supplier can claim credit of the tax collected and reflected in the return by the operator in the supplier’s electronic cash ledger.

How the value of the transaction shall be calculated for the collection of tax at source?
The value of a transaction for the purposes of TCS shall be “Net Value of Taxable Supply”. It can be calculated as

The aggregate monthly value of taxable supplies of goods and/or services [ except under u/s 9(5) on which E-commerce operator is required to pay complete tax in RCM ]
Less: Monthly value of taxable supply returned
= Net Value of Taxable Supply

What shall be the rate of Tax Collection?
The rate of TCS shall be
CGST – 0.5%
SGST – 0.5%
IGST – 1%
The same has been specified in Notification number 52/2018 – Central Tax

When does the tax need to be collected on a transaction?
Tax collection shall be done during the month in which supply was made, irrespective of actual collection. For instance, Supply made in the month of Jan and payment was received in Feb. In such a situation the tax shall be collected in Jan itself.

Till what date TCS should be paid to the government?
Tax collected shall be deposited to the government by the 10th of following month. Which means if the tax has been collected for the month of Jan it shall be deposited with the government latest by 10th Feb.

Which GST Return is filed by E-commerce operator?
E-commerce operator is required to file two Goods and Service Tax Return, which are
GSTR 8 – this monthly return shall be filed by each E-Commerce Operator collecting taxes under GST. It should be filed by 10th of next month. Which means for the month of Jan it should be filed till 10th of Feb.
GSTR 9B – This annual return is required to be filed by E-Commerce Operator by 31st December of the next Financial year. But, the provisions of TCS are made effective form 01.10.2018 and hence no annual return for Financial Year 2017-18 is to be filed.

Who is liable to pay the additional output TCS under GST in case of discrepancy?
The details of the supplies, including the value of supplies, submitted by every operator in the statements will be matched with the details of supplies submitted by all such suppliers in their returns. If there is any discrepancy in the value of supplies, the same would be communicated to both of them. If such discrepancy in value is not rectified within the given time, then such amount would be added to the output tax liability of such a suppler. The supplier will have to pay the differential amount of output tax along with interest.

What are the consequences of non payment of TCS collected?
Any amount not collected or collected but not deposited shall attract
Interest – as per section 52 (6) of CGST Act, 2017
Penalty – a per section 122 (vi) of CGST Act, 2017

What will be the place of supply for E-Commerce operators providing recharge or ticket booking facilities?
For E-Commerce operators like Paytm which are giving
Recharge facilities like talk time, DTH recharge etc, or
Charging convenience fee for travel ticket booking etc
In such cases, the place of supply will be the address of the customer as per the records of the supplier of service. The provisions regarding the same are given under section 12 (11) of the IGST Act, 2017.

Hope you had a Good Read !!

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