TCS stands for Tax Collected at Source. It is a tax levied by the government on the seller who collects the tax from the buyer at the time of sale of certain specified goods or services. The seller is required to collect the tax and deposit it with the government on behalf of the buyer.
TCS is a mechanism for collecting tax at source in order to widen the tax base and prevent tax evasion. It helps the government to keep track of transactions and to ensure that taxes are paid on time. TCS is governed by the provisions of the Goods and Services Tax (GST) Act.
Under GST, TCS is applicable on the e-commerce operators who facilitate the supply of goods or services through their platform. The e-commerce operators are required to collect TCS at the rate of 1% from the seller on the value of goods or services supplied through their platform.
Here are some important points to note about TCS in GST:
- Applicability: TCS is applicable on the e-commerce operators who are registered under GST and who facilitate the supply of goods or services through their platform.
- Rate: The rate of TCS is 1% of the net value of taxable supplies made through the e-commerce operator.
- Collection and Deposit: The e-commerce operator is required to collect the TCS from the seller at the time of making payment to the seller and deposit the same with the government within 10 days from the end of the month in which the TCS is collected.
- TCS Certificate: The e-commerce operator is required to issue a TCS certificate to the seller within 5 days from the date of deposit of TCS.
- Set off: The seller can claim the credit of the TCS collected by the e-commerce operator against his/her tax liability.
- Exemptions: TCS is not applicable if the seller is a non-resident, a person importing goods or services, or a person registered under the Composition Scheme.
- Returns: The e-commerce operator is required to file a monthly return in Form GSTR-8 containing details of TCS collected and deposited.
Failure to comply with the provisions of TCS under GST can result in penalties and interest.
Therefore, it is important for e-commerce operators to comply with the provisions of TCS in order to avoid any legal complications.
