Collection of TCS by E-commerce operators - GST Ready Reckoner - GST

Tax Collection at Source (TCS) As per Notification No. 51/2018 Central Tax dated 13 th September 2018 , provisions of TCS have been made effective from 01 October 2018 As per Section 52 of the CGST Act, 2017 the e-commerce operator , not being an agent, is required to collect an amount calculated at the rate not exceeding 1%, as notified by the Government on the recommendations of the Council, of the net value of taxable supplies made through it, where the consideration with respect to such supplies is to be collected by such operator. The amount so collected is called as Tax Collection at Source (TCS). Electronic Commerce, As per Section 2(44) of the CGST Act, 2017, electronic Commerce means the supply of goods or services or both, including digital products over digital or electronic network. Electronic-commerce operator, As per Section 2(45) of the CGST Act, 2017, electronic Commerce operator means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce. No, TCS is not required to be collected on exempt supplies , Where recipient is required to pay tax on reverse charge basis a composition taxpaye r cannot make supplies through e-commerce operator. Thus, question of collecting TCS in respect of supplies made by the composition taxpayer does not arise. Import of Goods or services or both Rate of TCS The GST Act does not prescribed the rate of TCS, when would be notified by the government on the recommendation of the council under As per the Notification No. 52/2018 Central Tax dated 20th September, 2018 the rate of tax collection at source (TCS) to be collected by every electronic commerce operator for intra-State taxable supplies SGST Act - 0.5% of the net value of intra-State taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the said operator. CGST Act -0.5% of the net value of intra-State taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the said operator. As per Notification No. 02/2018 Integrated Tax dated 20th September, 2018 notify the rate of tax collection at source (TCS) to be collected by every electronic commerce operator for inter-State taxable supplies IGST Act - 1.0% of the net value of inter-State taxable supplies made through it by other suppliers where consideration with respect to such supplies is to be collected by the said operator. Net value of taxable supplies :- means the aggregate value of taxable supplies of goods or services or both, other than the services on which entire tax is payable by the e-commerce operator, made during any month by a registered supplier through such operator reduced by the aggregate value of taxable supplies returned to such supplier during the said month. In other words, value of the supplies which are returned (supply return) may be adjusted from the aggregate value of taxable supplies made by each supplier (i.e. on GSTIN basis). Negative amount cannot be reported :- Some time sales return is more than sales and hence can negative amount cannot be reported. There will be no impact in next tax period also. In other words, if returns are more than the supplies made during any tax period, the same would be ignored in current as well as future tax period(s). Mandatory Registration for E-commerce operator as well as supplier of goods or services or both As per Section 24(ix) of the CGST Act, 2017 the ecommerce operator as well as the supplier supplying goods or services through an operator need to compulsorily register under GST, except the Notification 65/2017-Central Tax dated 15th November, 2017 a person supplying services, other than supplier of services under section 9(5) of the CGST Act, 2017 , through an e-commerce platform were exempted from obtaining compulsory registration provided their aggregate turnover does not exceed INR 20 lakhs (or INR 10 lakhs in case of specified special category States) in a financial year. TCS Collection:- who s suppliers are not liable for registration, e-commerce operators are not required to collect TCS on supply of services being made by such suppliers through their portal. Some Important Clarification Clarification on TCS liability under Sec 52 of the CGST Act, 2017 in case of multiple E-commerce Operators in one transaction. [ Circular No. 194/06/2023-GST Dated 17th July 2023 ] Clarification regarding TCS liability under section 52 of the CGST Act 2017 , in case of multiple E-commerce Operators (ECOs) in one transaction, in the context of Open Network for Digital Commerce (ONDC). 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 the CGST Act 2017 , 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 CGST Act .