E-commerce cos to deduct 1 pc tax collected at source (TCS) under GST from Oct 1
On Thrusday, The Finance Ministry notified TCS at the rate of 0.50 per cent of the net value of intra-state taxable supplies made through the e-commerce portals by other suppliers in the Central Tax law.
E-commerce companies will from October 1 have to deduct 1 per cent tax collected at source (TCS) before making payments to their suppliers.
The Finance Ministry Thursday notified TCS at the rate of 0.50 per cent of the net value of intra-state taxable supplies made through the e-commerce portals by other suppliers in the Central Tax law.
States too would follow suit and notify levy of 0.50 per cent SGST on intra-state supplies.
In the case of inter-state supplies by the e-commerce companies, Integrated GST (IGST) at the rate of 1 per cent would be deducted in the form of TCS while making payments to suppliers.
The ministry had last week notified October 1 as the date for implementation of the TCS provision under the Goods and Services Tax (GST) law. The law provided for levy of up to 1 per cent TCS.
EY Tax Partner Abhishek Jain said, "As the law had provided a levy up to 1 per cent, the e-commerce industry was awaiting this release of the exact rate of TCS --essentially to configure it into their system."
The GST, which subsumed over a dozen local taxes, was rolled out from July 1, 2017. However, to make it simpler for businesses in the initial months of rollout, TDS/TCS provisions of GST laws were kept in abeyance till June 30. Later on, it was deferred till September 30, 2018.
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TCS provision would increase compliance burden for e-commerce companies but help government in checking tax evasion.