The Tax collected at source provision becomes effective on E-commerce companies from October 2018. Please find attached the relevant notifications pertaining to TCS provision effective from October 2018. The GST council has also issued the attached FAQ on TCS. A summary of the key clarifications provided in the FAQ is as below:
- Mandatory registration and threshold exemption: Every e-commerce operator and the person supplying through e-commerce operator is required to obtain compulsory registration irrespective of the value of his supply.
- State-wise registration: An e-commerce operator is required to obtain separate registration for TCS in every State/ UT. Registration mandatory for an e-commerce operator in each state but presence is not mandatory. Registration can be obtained basis the Head Office being declared as place of business.
- Foreign ECO: Where registered supplier is supplying goods or services through a foreign e-commerce operator to a customer in India, such foreign e-commerce operator would be liable to collect TCS on such supply and would be required to obtain registration in each State / UT. If the foreign e-commerce operator does not have physical presence in a particular State / UT, he may appoint an agent on his behalf.
B. Levy, collection and rate
- Rate: Rate of TCS is notified as 1%.
- Value of net taxable supplies: Value of net taxable supplies is calculated at GSTIN level.
- Timing of collection of TCS: TCS is to be collected once supply has been made through the e-commerce operator and where the business model is that the consideration is to be collected by the e-commerce operator irrespective of the actual collection of the consideration.
- Consequences of non-compliance: Non-collection of TCS will attract interest as well as penalty.
- Multiple ECOs: In case multiple ECOs’ are involved in supply, the ECO making payment to the supplier will be liable to pay TCS.
- TCS to be paid within 10 days after the end of the month in which the said amount was collected.
- TCS cannot be paid through input tax credit of e-commerce operator.
- TCS to be deposited by the operator separately under the respective tax head (CT, ST, IT,UT).
D. Exemption from levy
- No TCS to be collected on the following supplies namely:
- exempt supplies
- supplies on which the recipient is required to pay under reverse charge mechanism
- supplies made by composition tax payer
- import of goods or services
- Further there is no exemption from TCS is granted on Golds.
E. Furnishing Forms
- Operator is required to submit a statement electronically containing details of the outward supplies effected through it and the amount collected as TCS during a month within 10 days after the end of such month.
- TCS amount deposited will be reflected in the electronic cash ledger of the actual registered supplier on the basis of FORM GSTR-8 filed by the operator.
- Operator has to file an Annual statement by December 31 following the end of the financial year in which the tax was collected in FORM GST-9B.
F. Other issues
- Value of the supplies which are returned may be adjusted from the aggregate value of the taxable supplies made by each supplier.
- If the returns are more than supplies made during a tax period, the negative amount should be ignored in current as well as future period as the same will not have any impact.
- The address on record of the customer with the supplier of services will be the place of supply for e-commerce operator in the following cases namely:
- recharge of recharge of talk time of telecom operator;
- recharge of DTH;
- in relation to convenience fee charged from customers on booking air tickets, rail supplied through online platform
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