TCS under GST from today; A critical step for e-commerce players Flipkart, Amazon, here’s why
Every electronic commerce operator (“operator”), who is not an agent, is eligible to collect TCS at prescribed rate when taxable supplies are made through it by other suppliers.
The government today implemented section 51, which is about tax deducted at source (TDS) and section 52 about tax collection at source (TCS) under the Goods and Service Tax (GST) regime. On September 17, kept October 01, to implement this new provision under the GST law.
Archit Gupta, Founder & CEO ClearTax said, "TCS deduction will make payment reconciliation between sellers of e-commerce and e-commerce operators a critical step for both."
Talking about e-commerce operators, Gupta said, "compliance will increase." He further added, "Ensuring TCS is collected on the correct amount and timely deposited will add to their overall compliance. They will also have to file and report TCS in GSTR-8, adding one more return for them every month."
As for e-commerce sellers, Gupta said, " It is likely to impact working capital for sellers, returns on which TCS is already collected may also add another layer to reconciliation challenges."
Every electronic commerce operator (“operator”), who is not an agent, is eligible to collect TCS at prescribed rate when taxable supplies are made through it by other suppliers and the consideration with respect to such supplies is to be collected by the operator.
Companies like Amazon, Flipkart, Jabong, Snapdeal, Shopclues, etc. are the ones operating in India. As per the law, it is compulsory for every e-commerce operator register in GST irrespective of threshold limits. Further it is mandatory for every person who supplies goods/services through an e-commerce operator to get registered under GST.
The rate of TCS is levied at 1% under CSGT, 1% under SGST and 2% under IGST.
A operator must pay the amount of TCS to government within 10 days after the end of the month in which such collection is made.
Furthermore, the operator is required to furnish a monthly statement in Form GSTR-8 by the 10th of the following month. Not only this, they are also required to file an Annual statement in Form GSTR-9B by the 31st of December following the end of every financial year.
Every tax collected by the operator must be credited to the cash ledger of the supplier who has supplied the goods/services through the operator. Later the supplier can claim credit of the tax collected and reflected in the return by the Operator in his [supplier’s] electronic cash ledger.