GST Impact on TCS
- 1. Introduction to TCS in GST
- 2. When and who is liable to collect TCS in GST
- 3. TCS in GST to be collected on what amount
- 4. Rate of TCS under GST
- 5. TCS under GST with example
- 6. Recent notification on TCS provision in GST
1. Introduction to TCS in GST
In GST, the obligation to collect tax at source has been placed upon Electronic Commerce Operators and no other class of suppliers.
When an ‘Electronic Commerce Operator’ receives payment (which is consideration by another person for a supply made by someone else), he must collect TCS at the rate to be notified (this rate will not exceed 1%) and pay the same to the Government.
2. When and Who is Liable to Collect TCS in GST ?
The TCS provisions under GST explains that an e-commerce operator is the one who is required to collect (by way of deduction) tax from the payment to be made to the suppliers of goods and services, who had supplied such goods and services using e-commerce operator’s platform.
Such amount is required to be collected on earlier of the following two events-
- time of credit of amount to the accounts of actual supplier of goods and/or services
- time of payment of amount to such suppliers then such tax has to be collected from the amount payable or paid to the supplier, representing consideration towards the supply of goods and/or services made through it.
3. TCS in GST to be Collected on What Amount
- TCS under GST has to computed on net value of taxable supplies
- For this purpose, net value of taxable supplies computation shall be made in the following manner
| Aggregate taxable value of goods and or services (i.e., value of goods before GST computation) | Rs. XXX |
| Less : The specific categories of services, the tax on intra-State supplies of which shall be paid by the electronic commerce operator | Rs. XXX |
| Less : Aggregate taxable value of returned goods and or services | Rs. XXX |
| Net value of taxable supplies for purpose of computation of TCS under GST | Rs. XXX |
4. Rate of TCS Under GST
Operator shall collect tax @ 1% of the net value of taxable supplies made through it by other suppliers.
5. TCS Under GST with Example
A better understanding of TCS provision under GST could be claimed from the example given below :
| Sale price of goods for goods sold through e commerce operator (say Sarees), the taxable value of which is (50 No’s X 200 per saree) | Rs. 10000 |
| CGST @ 14% | Rs. 1400 |
| SGST @ 14 % | Rs. 1400 |
| Total Invoice value | Rs. 12800 |
| Taxable value of services (Commission) charged by e commerce operator | Rs. 200 |
| Returned goods value by ecommerce operator (10 Nos X 200 per saree) | Rs. 2000 |
| Bill value raised by e commerce operator | Rs. 11000 |
How to calculate TCS under GST in the given example ?
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6. Recent Notifications on TCS Provision in GST
The CBIC has recently issued a Press Release stating that implementation of provisions relating to TDS/ TCS under CGST Act, 2017 (i.e. deduction of tax at source and collection of tax at source), to be deferred/ suspended till 30 Sept. 2018.
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