TCS under E-Commerce GST Regime – 16 Questions Answered. This article explains Tax Collection at source as per Goods & Service Tax Act 2017, TCS Certificate, TCS Due Dates etc…GST Applicability date, Short term and long term impact on GST & latest updates related to Tax deduction at source (TCS) under GST Regime. Lets understand what is the Tax Collection at source under GST, Applicability of GST in GST Regime, GST rates, its impact on your business and latest updates about GST Act 2017. Now check more details for TCS under GST Regime as per CGST Act 2017…

TCS under E-Commerce GST Regime

Q1. What is electronic commerce and who is an electronic commerce operator?

Ans. As per Section 2(44) of the CGST Act, 2017, electronic commerce means supply of goods and/or services including digital products over digital or electronic network. 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.

Q2. Can the electronic commerce operator sell goods and/or services on his own behalf?

Ans. Yes, there is no such restrictions under the GST. However, it would be treated as any other form of supply of goods and/or services and chargeable to tax accordingly. Since the goods and/or services are supplied on his own behalf, provisions of collection of tax source do not apply to such transaction.

Q3. What would be the rate of tax for collection of tax at source applicable to electronic commerce operator and on what value would the rate of tax be applied on?

Ans. The rate of tax for collection of tax source prescribed in the CGST Act, 2017 is 1%. The said 1% would be on the net value of taxable supplies made through the electronic commerce by other suppliers where the consideration with respect to such supplies is to be collected by the electronic commerce operator.

Q4. Does the net value of taxable supplies include all the transactions made through electronic commerce?


Ans. No, net value does not include transactions where the GST is liable to be paid by the electronic commerce operator on services to be notified by the Government under section 9(5) of CGST Act, 2017. Net value of taxable supplies is the aggregate value of taxable supplies of goods or services made during any month by all registered taxable persons through the operator reduced by the aggregate value of taxable supplies returned to the suppliers during the said month.

Q5. Are there any deductions allowable while computing the tax collection at source?

Ans. Yes, the taxable supplies returned to the supplier on the electronic commerce is allowed as a deduction while calculating the net value.

Q6. Is electronic commerce operator liable to collect tax at source if the consideration for supplies is not collected by him?

Ans. As per the provisions of Section 52(1), an electronic commerce operator shall collect tax at source only where the consideration in respect of supplies is to be collected by the operator.

Q7. Are there any powers vested with the Government to enhance the rate of tax in case of collection of tax at source in any time future?

Ans. No, section 52 does not vest any powers with any authority to increase the rate of tax fixed at 1%.

Q8. Can a supplier on electronic commerce opt not to register under GST?

Ans. No. In terms of section 24(ix) of CGST Act, 2017 irrespective of the threshold limit the supplier who supplies goods or services through E-commerce operator who is required to collected tax at source under Section 52 is required to obtain a registration. However, in case of supplier where the consideration with respect to supplies made on electronic commerce is not collected by the electronic commerce operator, then in such case, such supplier will be eligible to claim the threshold benefit for registration as per section 22 of CGST Act, 2017

Q9. What is the time at which the tax should be collected at source by the electronic commerce operator?

Ans. No clarity in Section 52. However, it may be construed to be the date of collection of consideration by the electronic commerce operator on behalf of the supplier.

Q10. Is there any threshold limit specified for collection of tax at source?

Ans. No, there is no threshold limit specified.

Q11. If out of the total consideration received by the operator some part is adjusted against receivable from the supplier, should tax be collected at source by the operator even on such amount which is adjusted against other amounts received from the supplier?

Ans. Yes, as per section 52, irrespective of the mode of recovery of consideration by the supplier from the operator, tax should be collected at source on the net value as defined in section 52(1) of the CGST Act, 2017. There is no deduction envisaged in the CGST Act, 2017 in this regard.

Q12. Whether the rate of tax of 1% specified in section 52 is CGST or SGST or a combination of both CGST and SGST?

Ans. The rate of TCS as specified in CGST Act, 2017 is payable under CGST and the equal rate of TCS is expected under the SGST Act also in effect aggregating to 2%.

Q13. What is the time within which such TCS is to be remitted by the e-commerce operator to Government account? Is the operator required to file any returns for this purpose?

Ans. The amount collected by the ecommerce operator (‘operator’,) is to be paid to the credit of appropriate government within 10 days after the end of the month in which amount was so collected. The operator is required to file a return online giving details of all amounts collected by him for the outward supplies made through his portal, within 10 days of the end of the calendar month to which such statement pertains. The return should contain the names of the actual supplier(s), details of respective supplies made by them and the amount collected on their behalf.

Q14. How can actual suppliers claim credit of this TCS?

Ans. TCS which is deposited by the E-commerce operator into government account will be reflected in the cash ledger of the registered supplier (on whose account such collection has been made) on the basis of the valid return filed by the E-commerce operator. The same can be used at the time of discharge of tax liability in respect of the supplies by the registered supplier.

Q15. What is the concept of matching in e-commerce provisions and how it would work?

Ans. The details of supplies and the amount collected during a calendar month which is furnished by every operator in his return will be matched with the corresponding details of outward supplies furnished by the concerned supplier in his valid return filed under section 37 for the same calendar month or any preceding calendar month. Where the details of outward supply, on which the tax has been collected, as declared by the operator in his statement do not match with the corresponding details declared by the supplier the discrepancy will be communicated to both persons.

Q16. What will happen if the details remain mismatched?

Ans. The value of a supply relating to any payment in respect of which any discrepancy is communicated and which is not rectified by the supplier in his valid return for the month in which discrepancy is communicated, the same will be added to the output liability of the said supplier in the subsequent month succeeding in which the discrepancy is communicated. The concerned supplier will, in whose output tax liability any amount has been added, be liable to pay the tax payable in respect of such supply along with interest on the amount so added from the date such tax was due till the date of its payment.

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