TCS under GST
Section 52 of the CGST Act,2017 provides for provisions regarding collection of tax at source by every electronic commerce operator, not being an agent, where the consideration with respect to such supplies is to be collected by the operator. In simple words, tax is to be collected at source in equivalence to 2% of value of taxable supply, by an electronic commerce operator where payment is being routed through it in a transaction carried out by 2 parties over the digital platform provided by the said operator (for e.g. it covers any transaction carried out on "Flipkart", where the payment is made by the buyer to the seller through the online portal of Flipkart). Further, marketing and advertisement portals, who does not collect payment on behalf of seller, are not covered under TCS provisions.
Central Government vide notification no. 52/2018- Central Tax (Rate) dt. 13th September 2018 provides for enforcement of the provisions of the said section from 1st October 2018.
Rate of tax: Rate not exceeding 2% (as may be notified by the government), of the net value of taxable supplies made through it by other suppliers.
Net value of taxable supplies here means the aggregate value of taxable supplies of goods or services or both, other than services notified under sub-section (5) of section 9, made during any month by all registered persons through the operator reduced by the aggregate value of taxable supplies returned to the suppliers during the said month.
Registration: As per section 24 & 25 of the CGST Act, 2017, every E-commerce operator, is required to obtain registration within 30 days of becoming liable to register, on the basis of a Permanent Account Number (PAN) or a Tax deduction and Collection Account Number (TAN).
Filing of Return: Section 52(4) of the CGST Act, 2017 provides the provisions regarding furnishing of return by the person collecting tax at source. As per the said section, every registered person required to collect tax at source needs to furnish a statement, electronically, containing the details of outward supplies of goods or services or both effected through it, including the supplies of goods or services or both returned through it, and the amount collected at source during a month within ten days after the end of such month in Form GSTR-8. Also, the payment needs to be made before furnishing of return.
In addition to the monthly return, every person in required to furnish an annual statement, electronically, containing the details of outward supplies of goods or services or both effected through it, including the supplies returned through it, and the amount collected under the said section during the financial year, in Form GSTR-9B before 31st December following the end of such financial year.
Rectification in returns: Any omission or incorrect particulars in a return can be rectified in the statement to be furnished for the month during which such omission or incorrect particulars are noticed, along with interest, before the due date for furnishing of statement for the month of September following the end of the financial year or the actual date of furnishing of the relevant annual statement, whichever is earlier.Implications in the hands of supplier Claim of credit: The supplier who has supplied the goods or services or both through the operator shall claim credit of the amount collected through Form GSTR-2A.
Any discrepancy on account of mismatch in credit claimed, which is not rectified by the supplier in his valid return or the operator in his statement for the month in which discrepancy is communicated, shall be added to the output tax liability of the said supplier, where the value of outward supplies furnished by the operator is more than the value of outward supplies furnished by the supplier, in his return for the month succeeding the month in which the discrepancy is communicated; and the supplier shall be liable to pay tax along with interest on the amount so added, from the date such tax was due till the date of its payment.