Starting 1st October 2018, every e-commerce operator has to collect TCS as per the GST regulations.

What is TCS under GST?

Tax Collected at Source (TCS) under GST means the tax collected by an e-commerce operator from the consideration received by it on behalf of the supplier of goods, or services who makes supplies through the operator’s online platform. TCS will be charged as a percentage on the net taxable supplies.

What is meant by the “net value of taxable supplies”?

The “net value of taxable supplies” means the aggregate value of taxable supplies of goods or services or both, made during any month by a registered supplier through such operator reduced by the aggregate value of taxable supplies returned to such supplier during the said month. 

What is the rate of TCS notified by the Government?

Rate of TCS is 0.5% under each Act (i.e. the CGST Act, 2017, and the respective SGST Act / UTGST Act respectively) and the same is 1% under the IGST Act, 2017. 

Is every e-commerce operator required to collect tax on behalf of the actual supplier?

Every e-commerce operator is required to collect tax where the supplier is supplying goods or services through e-commerce operators and consideration with respect to the supply is to be collected by the said e-commerce operator.

How can actual suppliers/organizers claim credit for TCS?

Based on the statement (FORM GSTR-8) filed by the e-commerce operator, the TCS would be credited to the electronic cash ledger of the actual supplier in the respective tax head. The said credit can be used at the time of discharge of tax liability by the actual supplier.

If the supplier is not able to use the amount lying in the said cash ledger, the actual supplier may claim a 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

How does Townscript handle TCS collected?

Townscript files the TCS collected from the transaction under an Organizer’s account on a monthly basis. Total TCS collected for a month for an organizer is filed at one go.