Calculation And Payment Of TCS Liability In GSTR-8

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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 of the net taxable supplies. The provision of TCS under GST is dealt under Section 52 of the CGST Act.

Who is liable to collect TCS under GST

Certain operators who own, operate and manage e-commerce platforms are liable to collect TCS. TCS applies only if the operators collect consideration from the customers on behalf of vendors or suppliers. In other words, when the e-commerce operators pay the consideration collected to the vendors, they have to deduct an amount as TCS and pay the net amount.

Here are a few exceptions to the TCS provisions for the services provided by an e-commerce platform:

  • Hotel accommodation/clubs (unregistered suppliers)
  • Transportation of passengers – radio taxi, motor cab or motorcycle
  • Housekeeping services like plumbing, carpentry, etc. (unregistered suppliers)

Registration requirements under TCS provisions of GST

The e-commerce operators liable to collect TCS have to register under GST compulsorily, and there is no threshold limit exemption for it. Also, the sellers supplying goods through the online portal of e-commerce players are mandatorily required to get registered under GST, except for a few exceptions.

Registration conditions are as follows:  

  1. Every e-commerce operator who is required to collect TCS must mandatorily register under GST
  2. Every person who supplies through an e-commerce operator, except those who make supplies, is notified under section 9 (5) of the CGST Act

When does liability arise?

TCS will be collected by e-commerce operators while making a payment to the vendor. This payment will be the consideration collected on the vendor’s behalf for the supplies made by him via the online portal.

Section 52 of the CGST Act  2017 allows e-commerce operators to collect tax at source on taxable goods or services rendered to it by other vendors, where he/she collects the credit for those supplies. According to the recent updates on tax collected at source, Budget 2020 proposes that a retailer obtain 0.1% as TCS from a buyer on supplies worth more than ₹50 lahks in a year. This must be followed if the sellers’ overall sales surpass ₹10 crores that year. If the buyer has no PAN or Aadhaar, then the TCS rate will be 1%.

Calculation of TCS liability in GSTR-8 

GSTR-8 Eligibility & Due Dates

GSTR-8 should be furnished by E-commerce operators every month. The definition under section 43(d) includes the detailing regarding who should be called E-commerce operators

e-commerce operator can file the GSTR-8 after the month completes, and the last date to furnish the details is the 10th of the succeeding month

Highlights of GSTR-8 Return Form

Every registered E-commerce operator files GSTR-8.

Every E-commerce operator file it before the 10th of the following month of the tax period mandatorily.

The details of the GSTR-8 filed by the e-commerce operator are available in part D of GSTR 2A to the concerned taxable persons.

GSTR-8 has 8 headings. Most of them are auto-populated

E-commerce platforms deduct the Tax collection at source(TCS) from the supplier of the goods and services and return it to the government

E-commerce operators pay 1% TCS on all the goods and services sold out through their platforms

How to compute the taxable value of the supplies for TCS

The value for the collection of the tax will be the ‘Net Value Of Taxable Supplies.’ This net taxable value will be calculated as follows:

The total value of taxable supplies of goods and/or services (other than notified services under GST law by all registered persons) Less: Taxable supplies returned to the suppliers through the e-commerce operator =Net value of Taxable Supplies

For example

 M/s.XYZ Ltd, a registered supplier, is supplying goods through an e-commerce operator. It has made supplies of Rs.55,00,000 in the month of Sep 2018. The goods returned were worth Rs.5,00,000 to XYZ Ltd. during the month of Sep 2018. Here, the net value of taxable supplies for TCS collection will be Rs.50,00,000 and TCS @ 1%, i.e. Rs.50,000, will be deducted by the e-commerce operator. Hence, the final payment to be made to the supplier is Rs.49,50,000.

Read more: Filing frequency and Due dates for GSTR-8

Interest on Late Payment of GST & Penalty of Missing the GST Return Due Date

According to the GST council rules and regulations, each subsequent late payment of taxes will accrue 18 % interest on the GST tax payable starting from the due date till the taxes are paid.

Frequently Asked Questions:

What shall be the rate of Tax Collected at Source (TCS)?

The TCS rate for CSGT is 0.5%

For SGST, it is 0.5%

And for IGST, it is 1%.

Is GST registration compulsory for e-commerce operators?

Yes. Any e-commerce operator must mandatorily register for Goods and Service Tax (GST). Section 24(x) of the CGST Act 2017 prescribes the same regardless of the price or quantity of the supply made by that operator.

What is the GST liability of TCS?

Under the Goods and Services Tax (GST) law, every e-commerce operator is required to collect TCS at the rate of 1 per cent of the taxable value of goods/services sold through its platform.

Who is liable to pay TCS?

Tax collection at source (TCS) is an additional amount collected as tax by a seller of specified goods from the buyer at the time of sale over and above the sale amount and is remitted to the government account.

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Moulik Jain
I am a seasoned marketer specializing in Tax, Finance, and MSMEs. I bring a wealth of hands-on experience to demystify complex subjects, providing insightful guidance for entrepreneurs and finance enthusiasts alike.

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