Just like Job Work, e-commerce transactions also involve a different buy-sell arrangement, hence needing special attention in GST Law. As per 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 deeper to the important aspects of GST TCS provision in India: Beginning with the definition of an e-commerce operator to penalties, this article will cover everything you want to know about TCS
The Operator
Any person or organization 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 an E-commerce operator.
Applicability: The applicability of 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.
Registration: 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 the 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 be 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 the GSTR 2A form.
GST 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 the 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 notifications here.
Best software to reconcile GST data faster and ensure 100% compliance – IRIS GST Software
As a registered taxpayer, reconciling your purchase invoices with the supplier-uploaded invoices on the GST system is a critical activity as it determines your ITC claim. Further, the Government issues legal notices to taxpayers for discrepancies in the ITC claimed in GSTR 3B and the amount as per supplier uploaded details. Our Smart Reconciliation comes in handy for managing reconciliation tasks in a timely, efficient and easy manner.
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Hi, thanks for providing a detailed easy to understand explanation. Apart from GSTR8 for TCS what other returns has to be filed by an ecommerce operator under GST if the operating is collecting commission from its sellers?
As E-commerce operator, you need to file only GSTR 8. But for your other services for which your turnover is exceeding 20 lac limit and you have taken GST registration as normal taxpayer then you need to file GSTR 1 and GSTR 3B.