Understanding the provisions of TCS (Tax Collection at Source) under 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)

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. This tax will be collected on the net value of taxable supplies.

What is the TCS rate under GST?

The rate of TCS under GST is 1% of the net taxable value of the goods or services sold through the e-commerce platform.

What is GSTR 8?

GSTR 8 is a return that e-commerce operators must file if they are obligated to deduct TCS (Tax collected at source) under GST. The return contains information about the supplies made using the platform and the TCS that was paid for those sales. GSTR-8 outlines the supply made through the e-commerce platform and the TCS collected on such deliveries.

The supplier can claim the input credit for the TCS deducted by the e-commerce operator when the e-commerce operator files GSTR-8. The amount of such TCS will be shown in Part C of the supplier’s Form GSTR-2A.

What is the Due Date for Filing GSTR 8?

The 10th of the following month is the deadline for GSTR 8 return filing.

Return Months Due Date
Sep-23 10th October 2023
Aug-23 10th September 2023
Jul-23 10th August 2023
Jun-23 10th July 2023
May-23 10th June 2023
Apr-23 10th May 2023
Mar-23 10th April 2023
Feb-23 10th March 2023
Jan-23 10th February 2023
Dec-22 10th January 2023
Nov-22 10th December 2022
Oct-22 10th November 2022
Sep-22 10th October 2022
Aug-22 10th September 2022
Jul-22 10th August 2022
Jun-22 10th July 2022

Frequency of GSTR 8

An E-commerce operator needs to file monthly as well as annual returns, which can be attained as follows:

Monthly Returns:

The TCS collector must file a TCS return in form GSTR-8 within 10 days after the end of the given month.

Annual Returns:

The e-commerce operator can file his annual returns via form GSTR 9B

The Annual return needs to be filed by the 31st of December following the end of every financial year, wherein the e-commerce operator needs to provide reconciliation between financial accounting results and GST Returns.

Credit Claim:

Upon the filing of GSTR 8 by the E-commerce Operator, the claim credit is automatically be reflected in the Supplier’s Electronic Cash Ledger, which the Supplier can claim and use for payments of taxes while filing GSTR 3B.

The Bottom Line

GSTR-8  is an essential compliance requirement for e-commerce operators in India. It involves reporting supplies, TCS, and reconciliation with other GST returns. By understanding the bottom line of GSTR-8 and adhering to its filing requirements, e-commerce operators can contribute to the efficient functioning of the GST system while avoiding penalties and legal issues.

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Also, Read:

Works Contract under GST

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Frequently Asked Questions

What is the provision of TCS under GST?

TCS stands for Tax Collected at source. In the GST regime, every e-commerce operator needs to collect 0.5% under the CGST Act and 0.5% under the SGST Act. In the case of inter-state transactions, 1% (under the IGST Act) on the net values of taxable supplies made through the e-commerce operator.

What are the provisions of TCS on sales?

Who is required to collect TCS on the sale of goods? The seller of the goods who receives any amount as consideration for the sale of any goods of the value exceeding INR 50 Lakhs is required to collect TCS on the sale of goods under section 206C(1H) of the Income Tax Act from the buyer.

Can TCS be claimed in ITR, and When can I claim a TCS refund?

You can claim a TCS refund in your I-T return (ITR) if you have paid more TCS than your actual tax liability. To claim the TCS refund, fill out the ITR form‘s relevant sections and provide supporting documentation.

author avatar
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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