TCS – Tax Collected at source under GST – Applicability

Tax Collected at Source (TCS) under GST is a provision where the E-commerce operator (ECO) is required to collect tax at a prescribed rate from the amount payable to the seller on the platform for the supply of goods or services. TCS is applicable on the consideration received by the seller from the buyer, and not on the full value of the transaction.

TCS under GST is applicable to the following:

1. Supplies made by an unregistered seller through an E-commerce operator.

2. Supplies made by a registered seller through an E-commerce operator to an unregistered buyer.

3. Supplies made by a registered seller through an E-commerce operator to a registered buyer where the E-commerce operator collects the consideration.

The rate of TCS is 1% of the net taxable value of the supplies made through the E-commerce platform. The E-commerce operator is required to file GSTR-8 to furnish the details of supplies, tax collected, and the amount paid to the seller on a monthly basis. The seller can claim credit for the TCS amount collected in their electronic cash ledger and use it to pay their tax liability.

WHO IS LIABLE TO COLLECT TCS UNDER GST

As per the GST law, the E-commerce operator (ECO) is liable to collect Tax Collected at Source (TCS) from the amount payable to the seller for the supply of goods or services made through the E-commerce platform.

REQUIREMENTS FOR TCS REGISTRATION

Every E-commerce operator (ECO) who is liable to collect TCS under GST is required to obtain registration under GST. The following are the requirements for TCS registration:

1. PAN: The ECO must have a valid Permanent Account Number (PAN).

2. Business registration: The ECO must have a valid registration under the Companies Act, 2013, or the Limited Liability Partnership Act, 2008, or any other applicable law.

3. Authorized Signatory: The ECO must have an authorized signatory who is a resident of India and has a valid PAN.

4. Bank account: The ECO must have a valid bank account in India.

Documents: The ECO is required to submit the following documents:

a. PAN card of the company

b. GST registration certificate

c. Memorandum of Association (MOA) and Articles of Association (AOA)

d. Board Resolution authorizing the person to apply for registration

e. Authorized signatory's PAN card, Aadhaar card, and photograph

f. Address proof of the place of business (rent/lease agreement, electricity bill, property tax receipt, etc.)

g. Bank account details

h. Digital signature of the authorized signatory (in case of company or LLP)

Once the ECO obtains the registration, they are required to file monthly returns in Form GSTR-8 to furnish the details of supplies made through the E-commerce platform, the amount of TCS collected, and the amount paid to the sellers.

FAQs

Certainly, here are some FAQs related to TCS (Tax Collected at Source) under GST:

1. What is TCS under GST?

A: TCS under GST is a mechanism to collect tax at the source from the seller on certain notified supplies. The TCS amount is collected by the electronic commerce operator (ECO) from the seller and deposited with the government. The TCS collected by the ECO is reflected in the GST portal in the electronic cash ledger of the supplier.

2. Who is required to collect TCS under GST?

A: E-commerce operators (ECOs) are required to collect TCS on supplies made through their platforms by sellers who are registered on their platform. The TCS is collected by the ECO from the payment made to the seller for the supply of goods or services.

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3. What are the supplies on which TCS is applicable under GST?

A: TCS is applicable on supplies made through e-commerce platforms on which tax is required to be collected at source (TCS). The supplies include goods and services that are notified by the government, such as hotel accommodation, transportation services, and online ticket booking services.

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4. What is the rate of TCS under GST?

A: The rate of TCS under GST is 1% of the net value of taxable supplies made through the e-commerce platform. The net value of taxable supplies is the total value of supplies made through the platform after deducting any taxes, cesses, and discounts.

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5. Is a seller required to register under GST if TCS is collected by the ECO?

A: Yes, a seller who makes supplies through an e-commerce platform on which TCS is collected is required to register under GST. The seller must obtain a GSTIN and file GST returns. The TCS amount collected by the ECO will be reflected in the electronic cash ledger of the seller and can be used to pay the tax liability.

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6. What is the due date for depositing TCS under GST?

A: The TCS collected by the ECO must be deposited with the government within 10 days from the end of the month in which it was collected. For example, the TCS collected in the month of August must be deposited by 10th September.

7. Can a seller claim credit for TCS collected by the ECO?

A: Yes, a seller can claim credit for the TCS collected by the ECO in their electronic cash ledger. The TCS amount can be used to pay the tax liability.

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8. Can a seller claim a refund of TCS collected by the ECO?

A: No, a seller cannot claim a refund of the TCS collected by the ECO. The TCS amount can only be used to pay the tax liability.

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9. Is TCS applicable on exports made through e-commerce platforms?

A: No, TCS is not applicable on exports made through e-commerce platforms. The exemption is available only on those supplies on which the tax is not leviable under the IGST Act.

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10. Can a seller avoid TCS by not registering under GST?

A: No, a seller cannot avoid TCS by not registering under GST. The ECO is required to collect TCS even if the seller is not registered under GST. In such cases, the TCS collected will be deposited in the e-commerce operator’s electronic cash ledger and the seller will not be able to claim credit for it.

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