Tax Collected at Source (TCS) under GST refers to the tax collected by an e-commerce operator on behalf of a supplier of goods or services who makes supplies through the operator's online platform.
TCS will be calculated as a percentage of net taxable supplies. Section 52 of the CGST Act deals with TCS claim services for ecommerce provisions under GST.
TCS Claim Services under GST
TCS is payable by certain operators who own, operate, and manage e-commerce platforms.
TCS applies only if the operators collect payment from customers on behalf of vendors or suppliers.
In other words, when e-commerce operators pay the consideration collected to the vendors they have contracted, they complete the transaction.
In other words, when e-commerce operators pay the consideration collected to the vendors, they must deduct TCS and pay the net amount.
Here are a few exceptions to the TCS provisions for e-commerce platform services:
- Hotels and nightclubs
- (unregistered vendors)
- Passenger transport - motor cab, radio taxi, or motorcycle
- Carpentry, Plumbing, and other housekeeping services (unregistered suppliers)
TCS claim services calculation example
If a buyer purchases a car from a showroom that is worth Rs. 11 lakhs, the showroom will deposit Rs. 11,000 as TCS.
As a result, the total amount due from the buyer is Rs.11,11,000
The customer received an invoice for Rs. 12,000, on which 1% TCS was charged and collected at Rs. 120.
As a result, the total amount payable by the customer is Rs. 12,120.
GST TCS claim services provision for e-commerce sales
Any dealer or trader selling goods on an e-commerce platform would receive payment from the platform after deducting a 1% tax under the IGST Act.
(0.5% CGST and 0.5% SGST)
The tax would have to be paid to the government by the tenth of the following month.
All dealers/traders are required to register for GST on a mandatory basis.
Form 24G submission
In the case of a government office, where tax has been paid to the credit of the Central Government without the production of a challan associated with the deposit of the tax in a bank, the following rules must be followed and Form 24G must be submitted:
Rules governing the deposit of TDS without a challan (changes to Rule 30)
If TDS was deposited without a challan, the person to whom TDS was reported for depositing to the government must submit a Form 24G statement to the agency authorised by the Principal Director of Income Tax (systems). [Rule 30(4)]
Form 24G must be submitted within 15 days of the end of the applicable month.
Form 24G must be submitted:
(a) with a digital signature
(b) electronically with verification in Form 27A
(c) or electronically verified as prescribed.
(d) Form 24G must be issued electronically under digital signature along with Form 27A verification or through an electronic process as prescribed.
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