by Tax Collected at Source (TCS) under GST means the tax collected by an e-commerce operator from the consideration received by it on behalf of the supplier of goods, or services who makes supplies through the operator’s online platform. TCS will be charged as a percentage on the net taxable supplies. The provision of TCS under GST is dealt under Section 52 of the CGST Act.
Liable to collect TCS under GST
Certain operators who own, operate and manage e-commerce platforms are liable to collect TCS. TCS applies only if the operators collect the consideration from the customers on behalf of vendors or suppliers. In other words, when the e-commerce operators pay the consideration collected to the vendors, they have to deduct an amount as TCS and pay the net amount.
Here are few exceptions to the TCS provisions for the services provided by an e-commerce platform:
- Hotel accommodation/clubs (unregistered suppliers)
- Transportation of passengers: Radio taxi, motor cab or motorcycle
- Housekeeping services like plumbing, carpentry etc. (unregistered suppliers)
Rate of TCS under GST:
Every electronic commerce operator, not being an agent, shall collect an amount calculated @ 0.5% of the net value of intra-State taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the said operator.
Deposit of TCS under GST by ECO to Government:
The TCS amount collected by the ECO has to be remitted to the Government Treasury within 10 days after the end of the month in which the collection was made.
Filing of Monthly & Annual Statements by ECO:
An electronic statement has to be filed by the ECO containing details of the outward supplies of goods and/ or services effected through it, including the supplies returned through it and the amount collected by it as TCS during the month within 10 days after the end of each month in which supplies are made. [Sub-section (4)]
Additionally, the ECO is also mandated to file an Annual Statement on or before 31st day of December following the end of the financial year. [Subsection (5)]
Rectification in Monthly Statement by ECO:
If the ECO discovers any discrepancy on his own not being the result of any scrutiny, inspection or enforcement proceedings, he has to rectify the statement. However, the limit for rectification is earlier of the two:
(i) Due date for filing statement for the month of September following the end of the financial year.
OR
(ii) Actual date of furnishing of relevant annual statement. Interest provisions are [Sub-section (6)]
Claim of Credit by Supplier:
Supplier can claim credit of the TCS amount in his electronic cash ledger. This amount should reflect in the monthly statement filed by the e-commerce operator. [Sub-section (7)].
Matching of details of supplies:
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. [Sub-section (8)]
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 supplier succeeding the calendar month in which the discrepancy is communicated, where outward supplies furnished by operator is more than the value as shown by supplier.
The supplier will have to pay the differential amount of output tax along with interest from the date such tax was due till the date of its payment. [Subsections 9 To 11].
Notice to the Operator:
An officer not below the rank of Deputy Commissioner can issue notice to an operator, asking him to furnish details relating to volume of the goods/services supplied, stock of goods lying in warehouses/godowns etc. [Sub-section (12)]
The operator is required to furnish such details within 15 working days. [Subsection (13)]
In case an operator fails to furnish the information, besides being liable for penal action under section 122, it shall also be liable for penalty up to ` 25,000. [Sub-section (14)]
Concepts relating to TCS Registration under GST:
Section 24(x) of the CGST Act, 2017 makes it mandatory for every e-commerce operator to get registered under GST.
Similarly, section 24(ix) of the CGST Act, 2017 makes it mandatory for every person who supplies goods/services through an operator to get registered under GST.
TCS Statement under GST:
The amount of tax collected by the operator is required to be deposited by the 10th of the following month, during which such collection is made.
The operator is also required to furnish a monthly statement in Form GSTR-8 by the 10th of the following month.
The operator is also required to file an annual statement in 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 Part C of FORM GSTR-2A on the common portal after the due date of filing of FORM GSTR-8.
