As per the GST law, an Electronic Commerce Operator is liable to collect taxes while making taxable sales on behalf of other suppliers. GST TCS provisions were deferred for a long time until 01-10-2018 when it was mandated by Notification 51/2018-Central Tax dated 13-9-2018.
Understand TCS related provisions under GST:
1. Is TCS applicable to you?
As per section 52 of CSGT Act, the TCS is to be collected by the e-commerce operator with respect to taxable supplies made through their portal by other suppliers, where the consideration in respect of such supplies is collected by him. So, if you are providing ecom portal to suppliers and buyers, TCS is applicable to you.
2. Who is an E-commerce operator?
As per GST Law, an E-Commerce Operator shall include every person who, directly or indirectly, owns, operates or manages an electronic platform that is engaged in facilitating the supply of any goods and/or services or in providing any information or any other services incidental to or in connection therewith but shall not include persons engaged in supply of such goods and/or services on their own behalf.
In simple words, E-commerce operator needs to collect tax when it supplies taxable goods/services on behalf of other suppliers.
Supplies made by the electronic commerce operator on its own account are not subject to TCS requirements.
3. What are the requirements for registration as a TCS collector?
Application for Registration for TCS collector is to be filed in REG-07. Registration certificate to be issued in REG-06. If a proper officer is satisfied that a person is no longer liable to deduct tax, he may cancel registration in REG-08.
4. What is the rate of TCS to be collected?
Operator shall collect tax @ 1% (i.e. 0.5% CGST and 0.5% SGST and 1% For IGST) of the net value of taxable supplies made through it by other suppliers.
5. What is the due-date to file TCS?
TCS shall be deposited within 10 days from the end of the month in which tax is collected.
6. Which return you need to file for TCS?
The person collecting tax is required to file a TCS return in form GSTR-8 within 10 days from the end of the month.
7. Do you need to file an annual return also as an e-commerce operator?
The e-commerce operator needs to file GSTR 9B, an annual return. Annual return needs to be filed by 31st of December following the end of every financial year. Here an e-commerce operator needs to provide reconciliation between financial accounting results and GST Returns. For the financial year 2017-2018, this provision of filing GSTR 9B is deferred.
8. How can the supplier Claim TCS credit?
Supplier will get TCS details auto-populated in GSTR 2X. There will be an automatic reflection in the electronic cash ledger of the supplier once the TCS collector files his/her GSTR 8 return. The Supplier can claim this credit and use it for payments of taxes while filing GSTR 3B.
Update: 10 April 2019 – Auto-population of TDS and TCS credit received from counterparties who filed their GSTR 7 and GSTR 8 in GSTR 2X form named as “TDS and TCS credit received” on GST Portal has been introduced.
9. Do You need to Match the details of supplies as reported by e-commerce operator?
All suppliers need to reconcile between 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 2X, supplier needs to match the gross sale value, sales returns value, net sale values and tax amounts with their details provided in GSTR 1.
If there is any discrepancy in the value of supplies, a supplier will have to pay the differential amount of output tax along with interest.
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