Frequently asked Questions

According to section 2(44) of the CGST Act 2017, e-commerce means to provide both goods and services including digital products over electronic network.

According to section 2(45) of the CGST Act 2017, electronic commerce operator is any person who owns, operates or manages digital platform for e-commerce

According to Section 52 of the CGST Act 2017, the e-commerce operator is required to collect an amount calculated by rate, as notified by the government, of the net value of taxable supplies made. The amount that is collected is called Tax Collection at Source (TCS).

Rate of TCS is 0.5% under the CGST Act, 2017 and the respective SCGST Act/ UTGST Act and it's 1% under the IGST Act, 2017. Notifications No. 52/2018- Central Tax and 02/2018- Integrated Tax booth dated 20th September, 2018 have been issued in this regard.

Yes, according to the section 24(x) of the CGST Act, 2017, every electronic commerce operator has to obtain compulsory registration.

According to the section 24(ix) of the CGST Act 2017, every person supplying goods or services through an e-commerce operator is required to register irrespective of the value of supply made by him/her but the person supplying services other than supplier of services under section 9(5) of the CGST Act 2017, through an e-commerce are let-off from compulsorily registering themselves if their average turnover is not over INR 20 lakhs (or INR 10 lakhs in case of special category States) in a financial year.

According to Section 24(ix) of the CGST Act 2017, any person who supplies goods or services through an e-commerce operator is compulsorily required to register. However, notification 65/2017- Central Tax dated 15th November 2017, the person supplying services other than supplier of services under section 9(5) of the CGST Act 2017, through an e-commerce are let-off from compulsorily registering themselves if their average turnover is not over INR 20 lakhs (or INR 10 lakhs in case of special category States) in a financial year.E-commerce operators are not required to collect TCS on supply of services by such suppliers through their portal.

As per the extant law, registration for TCS would be required in each state/UT as the obligation to collect TCS would be there in every intra/inter- State supply. To procure the registration where the business does not have a physical presence, the operator may have to declare the Head Office at the place of business.

If a registered supplier is supplying goods and services in India through a foreign e-commerce operator, that operator be liable to collect the TCS and will be required to obtain registration in each State/UT.If the foreign e-commerce operator is not physically present in India, he may hire an agent on his behalf to get the registration.

Yes, the e-commerce operator has to get a separate registration for TCS irrespective of the fact whether he is already registered under GST and has GSTIN.

"Net Value Of Taxable Supplies" is the aggregate value of taxable supplies of goods or services, other than services notified under Section 9(5), made during any month by all registered taxable persons through the operator reduced by the aggregate value of taxable supplies returned to the suppliers during the said month.

The value of net taxable supplies is calculated at the GSTIN level.

TCS should be collected after the supply has been made through the operator and where the business model is such that the consideration is to be collected by the e-commerce operator irrespective of the actual collection of the consideration.Example: if the supply has taken place through e-commerce operator on 30th October, 2018 but its consideration has been collected in November 2018, the TCS collected will be collected and reported in the statement for the month October 2018.

No. TCS shall not be collected on exempt supplies.

No. TCS will not be collected for supplies for which the recipient has to pay tax on reverse charge basis.

TCS will not be collected for supplies for which the recipient has to pay tax on reverse charge basis. Import of Goods fall under the domain of Customs Act, 1962 and it would be outside the scope of TCS. Hence, TCS is not liable to be collected on the import of both goods and services.

According to Section 10(2)(d) of the CGST Act, 2017 a composition taxpayer cannot make supplies through e-commerce operator.

There is no such exemption granted from TCS.

No. Payment is not allowed through Input Tax Credit of e-commerce operator.

An e-commerce company is required to collect tax only on the net value of taxable supplies made through it.Example: If two suppliers are A and B are supplying through an e-commerce operator the "Net Value of Taxable Supplies" will be calculated separately for both of them. If the value of returned supplies is more than supplies made on behalf of any such supplier during any tax period, the same would be ignored in his case.

Negative amount cannot be declared and there will be no impact in the next tax year as well. Meaning, if returns are more than supplies made during any tax period, it will be ignored in the current as well as the future tax period(s).

The amount collected by the operator should be paid to the government within 10 days after the month ends.

The TCS amount deposited by the operator to the government will reflect in the electronic cash ledger of the actual registered supplier (on whose account such collection has been made) on the basis of the statement filed by the operator in FORM GSTR-8 in terms of Rule 67 of the CGST Rules, 2017. That credit can be used at the time of discharge of tax liability by the actual supplier.

TCS collected is to be deposited by the e-commerce operator separately under the respective tax head (i.e. Central tax/State tax/Union territory tax/Integrated tax). As per the statement (FORM GSTR-8) filed by the e-commerce operator, the same would be credited to the electronic cash ledger of the actual supplier in the respective tax head. If the supplier is unable to use the amount lying in the cash ledger, the actual supplier may claim refund of the excess balance lying in his electronic cash ledger in accordance with the provisions contained in section 54(1) of the CGST Act, 2017.

Yes, every operator is required to issue a statement electronically, with the details of outward supplies of goods or services affected through it along with the goods or services returned. The amount to be collected as TCS during a month within 10 days after the end of that month in FORM GSTR-8. The operator is also required to file an annual statement by 31st day of December in regards to the end of the financial year in which the tax was collected in FORM GSTR-9B.

According to Section 52(6) of the CGST Act 2017, interest is applicable on omission as well in case of incorrect particulars noticed. In such a case, interest is applicable since it is a case of omission. Further penalty under section 122(vi) of the CGST Act, 2017 would also be levied.

According to the section 12(11) of the IGST Act 2017, the address on record of the customer with the supplier of services is the place of supply.

TCS will be collected by the e-commerce operator who makes payment to the supplier for a particular supply happening through it, which in this case will be ECO-2.

According to the Section 52(12) OF THE CGST Act 2017, any authority not below the rank of Deputy Commissioner may serve a notice asking the operator to issue the details of their supplies of goods or services or both as well as stock of goods held by the suppliers within 15 working days of the date of service of such notice.

E-commerce operators, who were unable to obtain registration in the month of 2019 but have already collected TCS for October 2018 but have already collected TCS for the said month may provide details of TCS collected in the month of October 2018 in the first return FORM GSTR-8 which is to be filed after obtaining registration.

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