GST TCS For E-Commerce Operators

GST TCS or GST Tax Collection at Source is very similar to GST TDS or Tax Deduction at Source. The GST TCS is applicable for e-commerce operators, while GST TDS is applicable for government departments, local authorities and government agencies. This article elaborates on the relevant regulations of GST TDS for suppliers while making supply through e-commerce operators.

Applicability of GST TCS

Under GST, “electronic commerce operator” means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce. Hence, e-commerce operators like Amazon, Flipkart, PayTM and other e-commerce companies operating in India should comply with the GST TCS provisions. Also read: Section 194M – TDS

GST Registration for Tax Collection at Source (TCS)

GST registration is mandatory for both e-commerce operators and persons supplying goods or services through an e-commerce operator. The aggregate turnover criteria for determining a taxable person under GST does not apply for both e-commerce operators or persons supplying goods or services through an e-commerce operator. Hence, both types of taxable persons should mandatorily obtain GST registration before commencing the business.

GST TCS Rate

GST TCS is applicable at the rate of 1% of taxable value. Hence, if the seller sells the product at Rs.1000 through an e-commerce operator like Amazon, the Amazon would deduct tax @ 1% of the net value of Rs.1000 i.e. Rs.10 and remit the same to the account of Government. Thus GST TCS applies on the net value of the goods or services supplied through the e-commerce operator. Find the GST rate for all goods and services.

Credit for TCS

Once Tax Collected at Source (TCS), the e-commerce operator should deposit the amount in the Governments account and file GSTR-8 by the 10th of the following month. Once GSTR-8 is filed, the details are processed by the GST Portal and credit is provided to the supplier in the electronic cash ledger.

Liability of the Supplier for incorrect GSTR-8 filing

The details of the supplies, including the value of supplies, submitted by the e-commerce operator in GSTR-8 is matched with the GSTR-1 filing made by the supplier. In case of discrepancy, the GST Portal would highlight the issue to both the e-commerce operator and supplier. If the discrepancy is not rectified within the given time, then the amount would be added to the output tax liability of the supplier. The supplier will have to pay the differential amount of output tax along with interest. Hence, it is important for all suppliers to ensure that TCS statements are correctly filed by the e-commerce operator.

Filing GSTR-8 - TCS Statement

All the e-commerce operators shall file the GSTR-8 or TCS statement by the 10th of the following month. While filing the statement, TCS shall apply. If any error occurred while filing GSTR-8, the e-commerce operator can rectify before 30th September. In addition, the e-commerce operators should mandatorily file the Annual TCS Statement along with the monthly GSTR-8 filings by the 31st December of every financial year.

GST Registration

GST LUT Form