TAX COLLECTED AT SOURCE UNDER GST
What does TCS under GST mean?
Tax Collected at Source (TCS) under GST means the tax collected by an e-commerce operator from the consideration received by it on behalf of the supplier of goods, or services who makes supplies through operator’s online platform. TCS will be charged as a percentage on the net taxable supplies.
Who is liable to collect TCS under GST?
Certain operators who own, operate and manage e-commerce platforms are liable to collect TCS. TCS applies only if the operators collect the consideration from the customers on behalf of vendors or suppliers. In other words, when the e-commerce operators pay the consideration collected to the vendors they have to deduct an amount as TCS and pay the net amount.
Exceptions to the TCS provisions for the services provided by an E-Commerce Platform
- Hotel accommodation/clubs (unregistered suppliers)
- Transportation of passengers – radio taxi, motor cab or motorcycle
- Housekeeping services like plumbing, carpentry etc. (unregistered suppliers)
Are you Liable to collect Taxes (TCS) under GST?
Do you own, operate or manage an E-Commerce Platform?
Whether the suppliers make taxable supplies
through this E-Commerce Platform? No
Whether consideration is collected by you? No gf
Whether following are supplied by through it
- Transportation of passengers through radio taxi, motor
Cab and motorcycle
- Hotel Accomodation/ Clubs (Unregistered Suppliers Yes
- housekeeping Services like plumbing, carpenting
Liable to collect tax on Net Value of Taxable
What is the rate applicable under TCS?
The dealers or traders supplying goods and/or services through e-commerce operators will receive payment after deduction of TCS @ 1%. The rate is notified by the CBIC in Notification no. 52/2018 under CGST Act and 02/2018 under IGST Act. This means for an intra-state supply TCS at 1% will be collected, i.e. 0.5 % under CGST and 0.5% under SGST. Similarly, for a transaction between the states, the TCS rate will be 1%, i.e. under the IGST Act.
Due date for depositing TCS
TCS will be deducted during the month in which the supply is made. It will be deposited within 10 days from the end of the month of supply to the credit of the government. Payment of the tax collected will be made in the following manner :
- IGST & CGST will be paid to the central government
- SGST to respective state governments
Which form can one use to file TCS returns?
E-commerce operators have to file GSTR-8 by 10th of the next month in which the tax was collected. This return will only be filed once the tax collected has been deposited to the respective credit of the government.
Example, the due date for GSTR-8 for September 2018 is on the 10th of October 2018.