The Tax Collected at Source (TCS) in GST is a special provision that mainly applies to e-commerce operators. It ensures that tax revenue is properly tracked when sales occur through online marketplaces. Understanding what is TCS in GST is crucial for businesses selling goods or services via platforms like Amazon, Flipkart, or other e-commerce portals.
Meaning of TCS in GST
TCS in GST refers to the tax collected by an e-commerce operator at a specified rate from the supplier of goods or services who sells through their platform. As per Section 52 of the CGST Act, every e-commerce operator is required to collect TCS on the net value of taxable supplies made through it.
Rate of TCS in GST
Currently, the rate of TCS under GST is 1% of the net value of taxable supplies. It is split as:
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0.5% CGST and 0.5% SGST (in case of intra-state supply), or
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1% IGST (in case of inter-state supply).
Who Needs to Collect TCS in GST?
E-commerce operators like Flipkart, Amazon, Zomato, Swiggy, and others are liable to collect TCS from suppliers registered under GST when transactions are carried out on their platforms. The suppliers then get the TCS credit in their electronic cash ledger, which they can utilize for tax payment.
Compliance for TCS in GST
E-commerce operators have to:
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Collect TCS at the time of making payments to suppliers.
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Deposit the TCS amount with the government within 10 days after the end of the month.
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File Form GSTR-8 monthly to report TCS details.
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Issue TCS certificates to suppliers so they can claim credit.
Importance of TCS in GST
The main purpose of TCS in GST is to:
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Ensure transparency in e-commerce transactions.
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Prevent tax evasion by unregistered suppliers.
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Maintain proper reporting of sales made through online platforms.
Conclusion
To sum up, TCS in GST is a mandatory compliance for e-commerce operators to collect tax at 1% from suppliers on their platforms. While it increases compliance responsibility for operators, it also ensures better tax tracking and transparency in digital business.
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