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Applicability of TCS under GST & it’s impact on E-commerce

The TCS & TDS provisions which were deferred has become applicable w.e.f from 01st October 2018. Hence the notified persons would be required to deduct TDS & collect TCS on transaction under GST.

The deferred TCS provisions has now become applicable w.e.f. 01st October 2018 and we aim to discuss how is it going to impact the E-commerce sector, what would they need to do as E-commerce operator and seller registered on E-commerce platforms. TCS under GST refers to tax collected by the electronic commerce operator like Amazon, Flipkart etc. on supply of goods or services through its portal and the payment for that supply is collected by the electronic commerce operator.

What are E-commerce operators & how it works

E-commerce Operators are online selling platforms like Amazon, Flipkart etc. which displays on their portal products as well as services which are supplied by some other person i.e. the sellers registered on these platforms to the consumer. When an order is placed by the consumer, the E-commerce operators collects the payment from consumers and remits the amount to Sellers after reducing their charges.

How is TCS under GST relevant to E-commerce

With TCS coming into effect, the E-commerce Operators would be required to collect the GST at the rate of 1% on the net value of goods/services supplied through e-commerce portal.

  • Registration requirement: The ecommerce operator as well as the supplier supplying goods or services through an operator need to compulsorily register under GST. The threshold limit of Rs. 20 lakhs (10 lakhs for special category states) is not applicable to them.
  • Depositing TCS with the government: The collector has to deposit the TDS to the government by 10th of succeeding month and file GSTR 8, based on which the supplier would be able to claim the credit of TCS.
  • Matching of details of supplies: The details of the supplies submitted by the E-commerce operator in GSTR 8 will be matched with the details of supplies submitted by all sellers in their respective 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 the seller. The supplier will have to pay the differential amount of output tax along with interest.

How can sellers claim the benefit of TCS under GST?

Any amount deducted as TCS and reported in GSTR 8 will automatically reflect in the electronic cash ledger of the seller. The supplier can take this amount as credit in his electronic cash register and use the same for payment of tax or any other liability.

(The author is a CA in practice at Delhi and can be contacted at: E-mail: abhinandansethia90@gmail.com, Mobile: +91-9811741451)

View Comments (3)

  • Any amount deducted as TCS and reported in GSTR 8 will automaticallycash ledger o reflect in the electronic f the seller. The supplier can take this amount as credit in his electronic cash register and use the same for payment of tax or any other liability.
    Dear sir Please give details i.e.Amt.will reflect in which column ,CGST / SGST or IGST ?? is there any column for TCS in Cash Ledger ??
    Thanking you from deepak pardeshi

  • Whether a Company selling its products through online is covered under ;E-Commerce' ? it will satisfy the definition.

    • Yes. A business acting as E-commerce operator (like Amazon, flipkart) would be required to collect TCS from the sellers registered on these platforms

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