Companies in Race to Register by October 1 to Comply with TCS Norms.

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08 Jun 2019

To comply with tax collected at source (TCS) rules, ecommerce players need to register with every state. This provision applies to foreign players as well to cater to Indian consumers. The industry has pitched for single registration in place of multiple state registrations as it would increase their compliance costs, but the government has so far maintained that they need to register in all states. Industry is pinning hopes on government permitting single registration.

Under the provisions, notified entities have to deduct up to 1% state GST and 1% central GST on intrastate supplies of over Rs2.5 lakh. In the case of interstate supplies of over Rs2.5 lakh, TDS will be 2% integrated GST. These provisions are aimed at checking tax evasion as TDS/TCS will leave a trail of transactions. In the case of foreign ecommerce platforms, there will be no TCS liability if the seller is based outside India.

Foreign ecommerce companies rush to register for GST in all states a clarification to this effect was given at a meeting between ecommerce players and the Central Board of Indirect Taxes and Customs held on Tuesday, according to a person privy to the deliberations of the meeting.

For ecommerce companies, this implies a deduction of 1% from the payments to their suppliers for goods sold on their platforms that will have to be deposited with the government. Tax experts said the government should provide for centralized registration for foreign ecommerce players.