GST Registration for E-commerce which Collects TCS

The government has recently made an amendment where GST registration has been made mandatory only for those e-commerce owners who bear the liability to collect Tax Collected at Source (TCS) under GST. Details related to GST registration for e-commerce operators responsible for TCS and TDS are discussed in the article.

1. Responsibility to Collect TCS

Under the Goods and Services Tax (GST) law, the responsibility to collect and deposit tax lies on e-commerce aggregators. The rate of Tax Collected at Source (TCS) is 1% of every transaction made. The online traders of goods and services will receive their payment after the tax is collected and deposited.

To claim this TCS, all online traders selling goods and services are required to get registered under GST regardless of their turnover.

However, any supplier of services with turnover of less than Rs. 20 lakhs who does not use the e-commerce platform is exempted from getting registered under GST.

2. Responsibility to Deduct TDS

Under the Goods and Services Tax (GST) law, the rate of Tax Deducted at Source (TDS) is 1% of every payment made to suppliers.

The entities responsible for deducting TDS are:

• Central or State Government establishment or department
• Government agencies
• Local authorities
• A board, authority, or body – which is
  • Set up by a state legislature or parliament Act, or
  • Established by a government

  - With participation of 51% or more by way of equity or control.

• Society established by Central Government, State Government, or local authorities
• Public Sector Undertakings (PSUs) as per latest notification

3. GST Registration

In order to deduct or collect TDS or TCS, the responsible entities are required to get registered by following these steps:

Step 1 – Obtain Form GST REG-07 electronically via the common GST Portal.

Step 2 – Fill it with details and duly sign it through EVC.

Step 3 – Submit the Form to a GST officer either directly or from a Facilitation Centre which the Commissioner has notified. The registration will be verified and granted by the proper officer.

Step 4 – Within 3 working days of submission, a registration certificate will be issued by the proper officer in Form GST REG-06.

4. Registration Cancellation

In case a person no longer remains liable to collect TCS or deduct TDS, then the proper officer will ascertain it and cancel the registration electronically through Form GST REG-08.

5. GST Registration for Online Information Suppliers Outside India

Online Information and Database Access or Retrieval (OIDAR) services are those whose supply is automated and delivery is mediated by the internet. There is minimal human intervention in these services and they cannot be delivered without the use of information technology.

Some of the OIDAR service providers are:

• Internet Advertising
• Cloud Service Providers
• Providers of e-books, movies, music, software applications, etc.
• Providers of retrievable or irretrievable data and information in electronic form
• Online Game Providers
• Providers of web-based services such as legal data, financial data, trade statistics, social networking, matrimonial services, etc.

Some of Non-OIDAR service providers are:

• Suppliers of goods who process orders electronically
• Suppliers of physical books, newspapers, journals, etc.
• Lawyers and consultants who provide services via e-mail
• Professional and educational course teachers who deliver content via internet
• Providers of computer equipment repair services offline
• Providers of repair services for software and hardware via internet
• Advertisers in newspapers, magazines, posters, television, etc.
• Providers of internet backbone services and internet access services

OIDAR service providers from outside India can register under GST by following these steps:

Step 1 – Obtain Form GST REG-10 from the common GST portal

Step 2 - Submit the Form to a GST officer. The registration will be verified and granted by the proper officer under certain conditions.

Step 3 – Within 3 working days of submission, a registration certificate will be issued by the proper officer.