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FAQs on TCS

We know it is quite difficult to know every about TCS under GST. So keeping this in mind, we have gathered some of the most important FAQs on TCS for your reference.

Q1. What is TCS under GST?

Ans. TCS (Tax Collected at Source) under GST is nothing but the tax collected by an e-commerce operator from the consideration received by it on behalf of the supplier of goods or services or both who makes supplies through their e-commerce platforms such as Flipkart or Amazon.

Q2. On which supplies, TCS is collected?

Ans. TCS is charged as a percentage on the net taxable supplies.

Q3. Who are eligible to collect TCS under GST?

Ans. An operator who owns operates and manages e-commerce websites are eligible to collect TCS. However, it shall be noted that TCS provision applies to those e-com operators who collect the consideration from the buyers on behalf of vendors or suppliers.

Q4. What is the different exception to the TCS Provision?

Ans. Here is a list of few exceptions to the TCS provisions:

a. Hotel or clubs that are unregistered
b. Passengers transportation – radio taxi, engine taxi, or motorcycle
c. Unregistered housekeeping services

Q5. What is the applicable TCS rate under GST?

Ans. As per the notification no. 52/2018 under CGST Act and 02/2018 under IGST Act, the dealers or traders providing goods or services or both through e-commerce platforms will receive payment after deduction of TCS @ 1%.

Q6. When does a person need to apply for TCS under GST?

Ans. The e-commerce operator liable to collect TCS have to obligatorily register under GST and there is no threshold limit exemption for it. Likewise, the sellers giving goods through the online portals need to compulsorily required to get registered under GST except for a few exceptions.

Q7. What are the pre-requisites for TCS registrations?

Ans. Here are the pre-requisites for TCS registration:

a. Every e-commerce operator who is required to collect TCS ought to mandatorily register under GST
b. Every person who supplies through an e-commerce operator, except those who make supplies notified U/S 9(5) of the CGST Act.
c. Moreover, note that the suppliers who render services through an e-commerce platform are exempt from registration if their aggregate turnover does not exceed 20 Lakhs INR. However, this rule does not apply for those service provider that makes inter-state supplies.
d. Suppliers of goods giving through an e-commerce platform are not exempt from registration.
e. An e-comm operator needs to obtain registration in every state in which it supplies goods or services or both.

Q8. What is the due date for the payment of TCS?

Ans. TCS will be deducted during the month in which the supply is made. Refer below-mentioned table to know the due date for the payment of TCS:

Month of CollectionQuarter EndingDue date of Payment
April30th June7th May
May7th June
June7th July
July30th September7th August
August7th September
September7th October
October31st December7th November
November7th December
December7th January
January31st March7th February
February7th March
March7th April

Note:
a. IGST and CGST will be paid to the central government.
b. SGST needs to be paid to the respective state governments.

Q9. Which form would one be able to use to file TCS returns?

Ans. E-commerce operators have to file GSTR-8 by the 15th of the next month in which the tax was collected. This return may be filed once the tax collected has been deposited to the respective credit of the government.

Q10. What is the due date for filing TCS Return?

Ans. Refer to the below-mentioned table to know the due date of filing TCS Return:

Month of CollectionQuarter EndingDue Date of filing return
April30th June15th July
May
June
July30th September15th October
August
September
October31st December15th January
November
December
January31st March15th May
February
March

Q11. What is the impact of the TCS provision?

Ans. From the government point of view, TCS has significantly decreased the cases of tax evasion under GST as tax is collected for each and every transaction by the e-com operators. However, from the e-com operators’ viewpoint, the Enterprise Resource Planning (ERP) systems have to be well integrated to apply provisions in the day to day business activities. Moreover, supplier’s working capital selling goods or/and services through an e-com operator until they file their TCS return and guarantee the excess taxes paid. This has prevented many SMEs vendor to sell goods or provide services online through e-com platforms.

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