#TCSunderGST #E-commerceoperatorTCS #GSTTCS
Who is required to deduct TCS on GST - e-commerce operator w.e.f. 1.10.18
A clause has been inserted under GST law for all the e-commerce aggregators. E-commerce aggregators are made responsible under the GST law for deducting and depositing tax at the rate of 1% from each of the transaction. Any dealers/traders selling goods/services online would get the payment after deduction of 1% tax. It is a significant change which would increase a lot of compliance and administration cost for online aggregators like Flipkart, snapdeal, amazon etc. They would need to deposit the tax deducted by the 10th day of the next month.
All the traders/dealers selling goods/services online would need to get registered under GST even if their turnover is less than 20 Lakhs for claiming the tax deducted by Ecommerce operators.
For example:
Mr. Kamal is a online trader who sells his goods online on Flipkart. He receives an order for Rs 100,000 inclusive of tax and commission. Flipkart charges a commission of Rs 1500. Flipkart would, therefore, need to deduct 1% tax (TCS) on the amount, including the money paid as commission (Rs. 1500) and GST (Rs. 18000 when GST @18%). Flipkart would thus be deducting tax for Rs 1000 (1% of Rs. 100,000).
Cases where TCS on GST is not required to be deducted
TCS required to be deducted by e-commerce operator @ 1% on net value of taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the operator!
Eg:- Suppose if Amazon is selling redmi mobile, than required to be deducted 1% TCS on behalf of redmi! Whereas if directly redmi selling mobile thought it’s own mi-app than no TCS!
Here amazon = e-commerce operator & redmi is a other supplier, hence TCS is applicable.
But if directly redmi selling without any engagement of e-commerce operator than there will be no TCS applicability.
Rate of TCS on SGST 0.5%, CGST 0.5% or 1% IGST
0.5% TCS is required to be deducted under both the CGST and the SGST Act and therefore the total TCS to be deducted is 1%. In case of an inter- state transaction, IGST would be levied and 1% TCS would be levied in this case as well.
No TCS on GST tax component!
Suppose supply is for Rs.118,000 TCS is liable to be deducted on Rs.100,000/- only
Foreign e-commerce operator do not have place of business in India since they operate from outside. But their supplier and customers are located in India. So, in this scenario will the TCS provision be applicable to such e-commerce operator and if yes, how will foreign e- commerce operator obtain registration?
Where registered supplier is supplying goods or services through a foreign e-commerce operator (say Alibaba, Amazon USA) to a customer in India, such foreign e-commerce operator would be liable to collect TCS on such supply and would be required to obtain registration in each State / UT. If the foreign e-commerce operator does not have physical presence in a particular State / UT, he may appoint an agent on his behalf.
It is very common that customers of e-commerce companies return goods. How these sales returns are going to be adjusted?
An e-commerce company is required to collect tax only on the net value of taxable supplies made through it. In other words, value of the supplies which are returned (supply return) may be adjusted from the aggregate value of taxable supplies made by each supplier (i.e. on GSTIN basis). In other words, if two suppliers “A” and “B” are making supplies through an e- commerce operator, the “net value of taxable supplies” would be calculated separately in respect of “A” and “B”. If the value of returned supplies is more than supplies made on behalf of any of such supplier during any tax period, the same would be ignored in his case.
Deposit of GST TCS and TCS Certificate
The amount of TCS deducted should be deposited with the govt by the deductor by the 10 th of the next month in Form GSTR 8 through the online portal gst.gov.in. The deductor would be liable to pay interest if the tax deducted is not deposited within the prescribed time limit as mentioned above.
The operator is also required to file an annual statement by 31st day of December following the end of the financial year in which the tax was collected in FORM GSTR-9B.
The TCS so deducted would also be visible to the suppliers in Form GSTR 2A and the supplier can include and avail the same in GSTR 2. The supplier can take this amount as credit in his electronic cash register and use the same for payment of tax or any other liability.
TCS UNDER GST
Who is required to deduct TCS on GST - e-commerce operator w.e.f. 1.10.18
A clause has been inserted under GST law for all the e-commerce aggregators. E-commerce aggregators are made responsible under the GST law for deducting and depositing tax at the rate of 1% from each of the transaction. Any dealers/traders selling goods/services online would get the payment after deduction of 1% tax. It is a significant change which would increase a lot of compliance and administration cost for online aggregators like Flipkart, snapdeal, amazon etc. They would need to deposit the tax deducted by the 10th day of the next month.
All the traders/dealers selling goods/services online would need to get registered under GST even if their turnover is less than 20 Lakhs for claiming the tax deducted by Ecommerce operators.
For example:
Mr. Kamal is a online trader who sells his goods online on Flipkart. He receives an order for Rs 100,000 inclusive of tax and commission. Flipkart charges a commission of Rs 1500. Flipkart would, therefore, need to deduct 1% tax (TCS) on the amount, including the money paid as commission (Rs. 1500) and GST (Rs. 18000 when GST @18%). Flipkart would thus be deducting tax for Rs 1000 (1% of Rs. 100,000).
Cases where TCS on GST is not required to be deducted
TCS required to be deducted by e-commerce operator @ 1% on net value of taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the operator!
Eg:- Suppose if Amazon is selling redmi mobile, than required to be deducted 1% TCS on behalf of redmi! Whereas if directly redmi selling mobile thought it’s own mi-app than no TCS!
Here amazon = e-commerce operator & redmi is a other supplier, hence TCS is applicable.
But if directly redmi selling without any engagement of e-commerce operator than there will be no TCS applicability.
Rate of TCS on SGST 0.5%, CGST 0.5% or 1% IGST
0.5% TCS is required to be deducted under both the CGST and the SGST Act and therefore the total TCS to be deducted is 1%. In case of an inter- state transaction, IGST would be levied and 1% TCS would be levied in this case as well.
No TCS on GST tax component!
Suppose supply is for Rs.118,000 TCS is liable to be deducted on Rs.100,000/- only
Foreign e-commerce operator do not have place of business in India since they operate from outside. But their supplier and customers are located in India. So, in this scenario will the TCS provision be applicable to such e-commerce operator and if yes, how will foreign e- commerce operator obtain registration?
Where registered supplier is supplying goods or services through a foreign e-commerce operator (say Alibaba, Amazon USA) to a customer in India, such foreign e-commerce operator would be liable to collect TCS on such supply and would be required to obtain registration in each State / UT. If the foreign e-commerce operator does not have physical presence in a particular State / UT, he may appoint an agent on his behalf.
It is very common that customers of e-commerce companies return goods. How these sales returns are going to be adjusted?
An e-commerce company is required to collect tax only on the net value of taxable supplies made through it. In other words, value of the supplies which are returned (supply return) may be adjusted from the aggregate value of taxable supplies made by each supplier (i.e. on GSTIN basis). In other words, if two suppliers “A” and “B” are making supplies through an e- commerce operator, the “net value of taxable supplies” would be calculated separately in respect of “A” and “B”. If the value of returned supplies is more than supplies made on behalf of any of such supplier during any tax period, the same would be ignored in his case.
Deposit of GST TCS and TCS Certificate
The amount of TCS deducted should be deposited with the govt by the deductor by the 10 th of the next month in Form GSTR 8 through the online portal gst.gov.in. The deductor would be liable to pay interest if the tax deducted is not deposited within the prescribed time limit as mentioned above.
The operator is also required to file an annual statement by 31st day of December following the end of the financial year in which the tax was collected in FORM GSTR-9B.
The TCS so deducted would also be visible to the suppliers in Form GSTR 2A and the supplier can include and avail the same in GSTR 2. The supplier can take this amount as credit in his electronic cash register and use the same for payment of tax or any other liability.
CA. Ashwani Rastogi
Partner, ARJS & Associates
M.Com, FCA, ACS, FAFD
Chartered Accountants
Address- 2029, Bank St, Near Shreem Jewellers, Block 47, Beadonpura,
Karol Bagh, New Delhi, Delhi 110005
Mobile Number- +91-9990999281
Mobile Number- +91-9990999281
Office Number: 011-42137042 Website- www.globaltaxation.in
More Details-http://www.globaltaxation.in/tcs-under-gst.html
More Details-http://www.globaltaxation.in/tcs-under-gst.html
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