1. What is TCS under GST?

 

Tax Collected at Source under GST means the tax collected by an e-commerce operator form the consideration received by it on behalf of the supplier of goods, or services who makes supplies through operator’s online platform.

 

2. Who is Required to Collect TCS?

 

The persons who either owns or operates or manages digital or electronic facility or platform for electronic commerce shall be considered as electronic commerce operators. Combined reading of the above definitions will entail that only companies who are in the business of providing such platform for electronic commerce shall be regarded as electronic commerce operators.

 

Here are few exceptions to the TCS provisions for the services provided by an e-commerce platform:

 

1. Hotel accommodation/clubs (unregistered suppliers)

 

2. Transportation of passengers– radio taxi, motor cab or motorcycle

 

3. Housekeeping services like plumbing, carpentry etc. (unregistered suppliers)

 

3. On Which Transaction TCS is Required to be Collected?

 

On the net value of taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by such operator.

 

Hence, TCS is to be collected if:

 

1. Taxable supplies are made through the operator by other suppliers and

 

2. Consideration with respect to such supplies is collected by the operator.

 

4. When will the Liability for Collecting TCS Arise?

 

52(1) of the CGST Act, 2017 only provides that the amount of tax shall be collected at such rate (1%) of the net value of taxable supplies. Hence, the point of collection has not been clearly prescribed. Hence, it appears that the TCS shall be collected at the point at which it can be said that the supplies have been made.

 

5.  Which Form is Used to File TCS Returns?

 

E-commerce operators have to file GSTR-8 by 10th of the next month in which the tax was collected. This return will only be filed once the tax collected has been deposited to the respective credit of the government.

 

6. How can TCS Return be Rectified?

 

As per Sec. 52(6) of the CGST Act, 2017 if any operator after furnishing a return discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars in the statement to be furnished for the month during which such omission or incorrect particulars are noticed, subject to payment of interest of 18%.

 

 

7. What are the Consequences of Not Complying with TCS Provision?

 

Following are the consequences of not complying with TCS provision-

 

1. TCS not collected– Failure to collect the tax can invite penalty of INR 10,000/- or the amount not collected or short collected, whichever is higher.

 

2. TCS collected but not paid to the Government– Section 76 of the CGST Act, 2017 can be invoked by the officer to recover such TCS along with interest.

 

3. Late filing of TCS returns- General penalty up to INR 25,000/- can be imposed u/s 125. It must however be noted that unless the return is filed, the concerned supplier shall not get the credit in his electronic cash ledger.

 

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