Collection of Tax at Source (TCS) under GST for E-Commerce Operators

What is TCS under GST?

TCS under GST refers to Tax Collected at Source under GST.  Section - 52, Central Goods And Services Tax Act, 2017 deals with TCS under GST.  TCS are calculated as a percentage of Net taxable supplies. Except for a few exceptions, every e-commerce operator must begin collecting TCS on October 1, 2018.

Who are liable to deduct TCS under GST?

There are certain ecommerce operators who own, operate and manage ecommerce platform through which sellers (suppliers) and buyers entered into transaction online and consideration were collected by such ecommerce operator.   In such cases, TCS provisions are applicable. However, there are followings exceptions to the TCS provisions for the services provided by an e-commerce platform:

o  Hotel accommodation/clubs (unregistered suppliers)

o  Transportation of passengers – radio taxi, motor cab or motorcycle 

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

For example, where some manufacturers or suppliers sell its product through Amazon, Flipkart or other ecommerce platform (ECOM). such ECOM being e-commerce operators, are liable for deduction of TCS before making payment of consideration to such suppliers.

What is the TCS rate under GST?

The dealers or traders supplying goods and/or services through e-commerce operators will be subject to deduction of TCS @ 1%.  

TCS at 1% will be collected for intra-state supplies, i.e. 0.5% under CGST and 0.5% under SGST.  Similarly, the TCS rates for transactions between states will be 1%, as the IGST Act requires. [Notification No. 52/2018 under the CGST Act and 02/2018 under the IGST Act]