Any person who is managing and operating an e-commerce platform is required to collect taxes at the time of any taxable supply that is taking place through his online platform as per the section 52 of CGST Act 2017. The tax collected through this e-com operator is known TCS (Tax Collected at Source).
In this article, we will dig deeper into the aspects of TCS and GSTR-8 under the GST regime.
- Who is an e-commerce operator?
- When TCS provision is applicable under GST Regime?
- How to register as a TCS collector?
- What GST Rate is applicable for tax collection?
- What is the due date for depositing the TCS?
- How many GST Returns an e-commerce operator has to pay?
- Input Tax Credit (ITC) Claim
The following three factors decide the application of TCS provision under GST and these are:
1. Any person applying for TCS registration must have an e-commerce platform.
2. The tax collected by the person shall be on the behalf of other supplier and not for his product supplies.
3. He/she must have received an amount of consideration in respect of such supplies.
In case if an e-commerce operator wants to register as a TCS collector, he/she needs to fill GST REG-07 Form. Once the authorized officer verifies the applied registration form along with documents, a registration certificate is issued in GST REG-06. The applicant will receive this TCS registration certificate within 3 working days from the date of submission of application.
Every registered TCS collector shall deposit the TCS within 10 days after the month-end for which TCS had been collected. Let us understand this with an example:
If an e-commerce operator collected tax on 30th July than he is liable to deposit this collected TCS amount on or before 10th August.
There are two GST Returns that every registered e-commerce operator needs to file and they are:
i). Monthly GST Return
Every TCS collector needs to file a GSTR-8 Form within 10 days after the end of the month for which the TCS had been collected.
ii). Annual GST Return
Every registered e-commerce operator is required to file GSTR-9B Form as a GST Annual Return. The due date for filing GSTR-9B is 31st December after the end of every financial year. Howsoever, it shall be noted that the service of GSTR-9B has been suspended for the financial year 2017-2018.
After filing GSTR-8 Form credit amount automatically reflects in the supplier’s electronic cash ledger. This Input Tax Credit can be used by the supplier at the time of filing GSTR-3B for paying the taxes. Moreover, the TCS details will get auto-populated in the GSTR-2A of the supplier.
The supplier can reconcile the supply details by comparing the supplies reported by them in GSTR-1 Form and the supplies details provided by the e-commerce operator in their GSTR-8 Form. Moreover, based on auto-populated GSTR-2A Form, the supplier is required to reconcile the gross sales value, sales return value, net sales value and tax amount with that of GSTR-1. In case if there is any discrepancy in the supply value, the supplier will be liable to pay the differential amount together with interest.