Clarification on TCS liability under Sec 52 of the CGST Act, 2017 in case of multiple E- commerce Operators in one transaction - GST - States - 12039(31)/58/2023

GOVERNMENT OF ANDHRA PRADESH COMMERCIAL TAXES DEPARTMENT PROCEEDINGS OF THE CHIEF COMMISSIONER OF STATE TAX, ANDHRA PRADESH :: GUNTUR PRESENT: SRI. M.GIRIJA SHANKAR, I.A.S., CCST s Ref. CIRCULAR Computer No: 2148243 File No: REV03-12039(31)/58/2023-COMM, Date. 21/07/2023 Sub: Clarification on TCS liability under Sec 52 of the CGST Act, 2017 in case of multiple E- commerce Operators in one transaction-Reg. Ref: Circular No.194/06/2023-GST, dated 17.07.2023 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs. Reference has been received seeking clarification regarding TCS liability under section 52 of the Andhra Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as APGST Act ), in case of multiple E-commerce Operators (ECOs) in one transaction, in the context of Open Network for Digital Commerce (ONDC). 2.1 In the current platform-centric model of e-commerce, the buyer interface and seller interface are operated by the same ECO. This ECO collects the consideration from the buyer, deducts the TCS under Sec 52 of the APGST Act, credits the deducted TCS amount to the GST cash ledger of the seller and passes on the balance of the consideration to the seller after deducting their service charges. 2.2 In the case of the ONDC Network or similar other arrangements, there can be multiple ECOs in a single transaction - one providing an interface to the buyer and the other providing an interface to the seller. In this setup, buyer-side ECO could collect consideration, deduct their commission and pass on the consideration to the seller-side ECO. In this context, clarity has been sought as to which ECO should deduct TCS and make other compliances under section 52 of APGST Act in such situations, as in such models having multiple ECOs in a single transaction, both the Buyer-side ECO and the Seller-side ECO qualify as ECOs as per Section 2(45) of the APGST Act. 3. In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law across the field formations, the Chief Commissioner, in exercise of his powers conferred by section 168 (1) of the APGST Act, hereby clarifies the issues as under: Issue 1: In a situation where multiple ECOs are involved in a single transaction of supply of goods or services or both through ECO platform and where the supplier-side ECO himself is not the supplier in the said supply, who is liable for compliances under section 52 including collection of TCS? Buyer Buyer-side ECO Supplier-side ECO Suppler Clarification: In such a situation where multiple ECOs are involved in a single transaction of supply of goods or services or both through ECO platform and where the supplier-side ECO himself is not the supplier of the said goods or services, the compliances under section 52 of APGST Act, including collection of TCS, is to be done by the supplier-side ECO who finally releases the payment to the supplier for a particular supply made by the said supplier through him. e.g.: Buyer-side ECO collects payment from the buyer, deducts its fees/commissions and remits the balance to Seller-side ECO. Here, the Seller-side ECO will release the payment to the supplier after deduction of his fees/commissions and therefore will also be required to collect TCS, as applicable and pay the same to the Government in accordance with section 52 of APGST Act and also make other compliances under section 52 of APGST Act. In this case, the Buyer-side ECO will neither be required to collect TCS nor will be required to make other compliances in accordance with section 52 of APGST Act with respect to this particular supply. Issue 2: In a situation where multiple ECOs are involved in a single transaction of supply of goods or services or both through ECO platform and the Supplier-side ECO is himself the supplier of the said supply, who is liable for compliances under section 52 including collection of TCS? Buyer Buyer-side ECO Supplier(also an ECO) Clarification : In such a situation, TCS is to be collected by the Buyer-side ECO while making payment to the supplier for the particular supply being made through it. e.g. Buyer-side ECO collects payment from the buyer, deducts its fees and remits the balance to the supplier (who is itself an ECO as per the definition in Sec 2(45) of the APGST Act). In this scenario, the Buyer-side ECO will also be required to collect TCS, as applicable, pay the same to the Government of Andhra Pradesh in accordance with section 52 of APGST Act and also make other compliances under section 52 of APGST Act. 4. It is requested that suitable trade notices may be issued to publicize the contents of this Circular. 5. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Chief Commissioner. M Girija Shankar I A S Chief Commissioner