TCS under GST i.e. Tax Collected at Source became applicable from 1st October 2018. Here is a brief explanation on TCS:
- Provisions of TCS are applicable to e-commerce operators.
- E-commerce operator is any person who owns and operates a digital platform to run the e-commerce business.
- E-commerce suppliers are the persons selling their goods or services using the e-commerce portal.
- Payment received from customers for such goods or services is collected by the e-commerce operator.
- E-commerce operator is liable to collect TCS @1% on the payment made to e-commerce suppliers. Thus, In the case of Inter-State Sale, IGST should be charged at 1%. In case of Intra-State Sale, CGST (0.5%) and SGST (0.5%) should be charged.
Example – TCS GST
Mr.X is a registered supplier on Amazon India. He sells goods of Rs.50,000 online to Mr.Y through Amazon for which it charges a 2% commission. Amazon collects the payment from Mr.Y. How will the provisions of TCS be attracted in this case?
- Amazon is the e-commerce operator, Mr.X is the e-commerce supplier and Mr.Y is the customer
- Amazon would collect payment from Mr.Y, collect TCS and make the remaining payment to Mr.X
- TCS @1% would be collected on Rs.50,000 i.e. the amount inclusive of GST charged on goods and Commission charged by Amazon
- Amazon would deposit TCS of Rs.500 while filing its GST Return i.e. GSTR-8 on GST Portal
- TCS credit would be populated in GSTR-2A of Mr.X and would be added to his e-cash ledger on the GST Portal
TCS provisions are not applicable if following services are provided by e-commerce platform:
- Housekeeping services like plumbing, carpenting etc
- Accommodation services by hotels, inns, clubs, guest house etc
- Passenger transportation services by radio-taxi, motor cab, motorcycle etc
No. TCS under GST and under Income Tax are different.
* TCS under Income Tax is collected by the seller from buyer on sale of specified goods at specified rates. Seller should file Form 27EQ on TRACES.
* TCS under GST should be collected by e-commerce operator from e-commerce seller on e-commerce sales at 1%. E-Commerce Operator should file GSTR-8 on GST Portal
The e-commerce operator should collect TCS from e-commerce supplier at 1%. TCS should be deposited with the GST Department on GST Portal within 10 days from the end of the month in which TCS was collected.
Goods/sectors that are out of the GST ambit include alcohol and specified petroleum products like petroleum crude, high-speed diesel, motor spirit, aviation turbine fuel and natural gas. Alcohol for human consumption continues to attract state excise duty and VAT. Tobacco and tobacco-based products attract both excise duty and GST. Taxes such as stamp duty, toll tax, road tax, electricity duty etc. are not part of GST.
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Customs duty and cess as applicable along with IGST+ GST compensation cess. IGST and GST compensation cess shall be paid after adding all customs duty and customs cess to the value of imports.
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