GST Impact on TCS | Tally

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 ?
  • TCS to be collected on aggregate value taxable value supplies (Goods + Services) = Rs. 10,000 (+) Rs. 200 = Rs. 10,200
  • TCS rate in GST = 1% (CGST) and 1% (SGST)
  • TCS to be computed on Net value of taxable supplies (see the formulae above)
  • Net value in the given case would be Rs. 10,200 (-) Rs. 2,000 = Rs. 8,200/-
  • In the given example TCS to be collected by e commerce operator would work out as

    Rs. 8,200 x 1 % = Rs. 82 (CGST)

    Rs. 8,200 x 1%. = Rs. 82 (SGST)

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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