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Tax Collected at Source on E-commerce companies - relevant notifications and FAQs

communityadmin

@communityadmin

October 3, 2018

Public Policy

594

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:

A. Registration

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.

C. Payment

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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