The TCS applicable on e-commerce operator in GST is an important provision designed to bring transparency in online transactions. Under this system, e-commerce operators like Amazon, Flipkart, and Zomato must collect a small percentage of tax at source from sellers using their platforms. This ensures that tax is reported correctly, while also minimizing revenue leakage.
What is TCS Applicable on E-Commerce Operator in GST?
Tax Collected at Source (TCS) is a mechanism where the e-commerce operator deducts tax from the amount payable to a registered supplier. According to GST law, this provision applies when suppliers sell goods or services through an online marketplace. The TCS applicable on e-commerce operator in GST acts as a monitoring tool, ensuring sellers declare accurate turnover in their GST returns.
Rate of TCS Applicable on E-Commerce Operator in GST
The GST law prescribes a standard rate for TCS on online platforms.
| Transaction Type | TCS Rate | Applicability |
|---|---|---|
| Sale of Goods via e-commerce | 1% (0.5% CGST + 0.5% SGST) | Intra-state sales |
| Sale of Services via e-commerce | 2% (1% CGST + 1% SGST) | Intra-state services |
| IGST on inter-state supply | 1% IGST | Across states |
Thus, it is applicable on e-commerce operator in GST depends on the type of supply and whether it is intra-state or inter-state.
Compliance for E-Commerce Operators
Every e-commerce operator has to:
-
Collect TCS under GST while making supplier payments.
-
File GSTR-8 return every month showing the amount of TCS collected.
-
Issue TCS certificates to suppliers so they can claim credit.
This way, the its applicable on e-commerce operator in GST ensures seamless tracking of online sales and proper reporting.
Impact on Sellers
Suppliers selling through e-commerce platforms can claim the TCS deducted by operators as credit in their electronic cash ledger. This reduces their tax liability while filing GST returns. Therefore, although the TCS impact on sellers reduces seller cash flow temporarily, it ensures compliance and builds transparency in the system.
Conclusion
The TCS applicable on e-commerce operator in GST plays a vital role in regulating online transactions. It ensures accurate reporting of turnover, prevents tax evasion, and provides credibility to the e-commerce ecosystem. Both operators and sellers must comply with these rules to avoid penalties.
👉 Need help with GST compliance or filing GSTR-8? Contact us here for expert assistance.