GST ON ELECTRONIC COMMERCE OPERATORS EFFECTVE FROM 1.10.2018
The Goods and Services Tax
Act, 2017 came into force in India with effect from 1.7.2017.
The Central Government has
notified that every electronic commerce operator has to collect IGST for Inter-State
taxable supplies and CGST and SGST/UTGST for Intra-State taxable supplies made
through electronic commerce by other suppliers, where the consideration with respect to such
supplies is to be collected by the said operator.
The IGST and CGST and
SGST/UTGST rates applicable on the net taxable vale with effect from 1.10.2018 were given below:
INTER-STATE
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INTRA-STATE
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IGST
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CGST
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SGST/UTGST
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1%
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0.5%
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0.5%
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The State Governments/Union
Territories will issue separate Notifications based on the above Notifications.
The Notifications issued by the Central Government under IGST Act and CGST Act were given below for ready reference.
[To be published in the Gazette of India,
Extraordinary, Part II, Section 3,
Subsection
(i)]
Government
of India
Ministry of Finance
(Department
of Revenue)
Central
Board of Indirect Taxes
and
Customs
Notification No. 02/2018
– Integrated Tax
New Delhi, the 20th September,
2018
G.S.R. …..(E).— In exercise of the powers conferred by the second proviso to section 20 of the
Integrated Goods and Services Tax Act, 2017 (13 of 2017), read with sub-section (1) of section
52 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on
the recommendations of the Council, hereby notifies that every electronic commerce operator,
not being an agent, shall collect an amount calculated at a rate of one per cent. of the net value of inter-State taxable supplies made through it by other suppliers where consideration with respect
to such supplies is to be collected by the said
operator.
[F.
No. 349/58/2017-GST(Pt.)]
(Gunjan Kumar Verma) Under
Secretary to the Government of India
[To be published in the Gazette of India,
Extraordinary, Part II, Section 3,
Subsection
(i)]
Government
of India
Ministry of Finance
(Department
of Revenue)
Central
Board of Indirect Taxes
and
Customs
Notification No.
52/2018 – Central
Tax
New Delhi, the 20th September,
2018
G.S.R. …..(E).— In exercise of the powers conferred by sub-section (1) of section 52 of the
Central Goods and Services
Tax Act, 2017 (12 of 2017), the Central
Government, on the
recommendations of the Council, hereby notifies that every electronic commerce operator, not
being an agent, shall collect an amount calculated at a rate
of half per cent. of the net value
of intra-State taxable supplies made through it by other suppliers where the consideration with
respect to such supplies is to be collected
by
the said operator.
[F.
No. 349/58/2017-GST(Pt.)]
(Gunjan Kumar Verma) Under
Secretary to the Government of India
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Frequently Asked Questions
on TCS
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Sr. no.
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Question
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Answer
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1.
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What
is
Electronic
Commerce?
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As per Section 2(44) of the CGST Act,
2017, electronic Commerce means the supply of goods or services or
both, including digital
products over digital or
electronic network.
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2.
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Who is an e-
commerce operator?
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As per Section 2(45)
of the CGST Act,
2017, electronic Commerce operator means any person who owns, operates or manages digital or
electronic facility or platform for
electronic
commerce.
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3.
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What is Tax Collection at Source
(TCS)?
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As per Section 52 of the CGST Act, 2017 the e-
commerce operator, not being an agent,
is required to collect an amount
calculated at the rate not
exceeding
one per cent., as notified
by the Government
on the recommendations
of the Council, of the net value of taxable supplies
made through it, where the consideration with
respect to such supplies is to be collected by such operator. The amount
so collected is called
as Tax Collection at Source (TCS).
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4.
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What is the rate of TCS notified by
Government?
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Rate of TCS is 0.5% under each Act (i.e. the
CGST Act, 2017 and the respective SGST Act
/ UTGST Act respectively) and the same is 1%
under the IGST Act, 2017. Notifications No.
52/2018 – Central Tax and 02/2018-Integrated
Tax both dated 20th September, 2018 have been
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9
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issued in this regard. Similar notifications have been issued by the respective
State Governments also.
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5.
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Is it mandatory for e-
commerce operator
to obtain registration?
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Yes. As per section 24(x) of the CGST Act,
2017, every electronic commerce operator has to obtain compulsory registration irrespective
of the value of
supply made by him.
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6.
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Whether a supplier of goods or services supplying through
e- commerce operator
would be entitled to
threshold exemption?
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As per Section 24(ix) of the CGST Act, 2017,
every person supplying goods through an e-
commerce operator shall be mandatorily
required to register irrespective of the value
of supply made by him. However,
a person
supplying services, other than supplier
of services under section 9 (5) of the CGST Act,
2017, through an e-commerce platform
are exempted from obtaining compulsory registration provided their
aggregate
turnover does not exceed INR 20 lakhs (or INR 10 lakhs
in case of specified special category States) in a financial year. Government
has issued the
notification No. 65/2017 – Central Tax dated
15th November, 2017 in this
regard.
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7.
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Whether
e-Commerce operator is required to
obtain registration
in every State/UT in which suppliers
listed on their e-commerce
platform are located
to undertake the
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As per the extant law, registration
for TCS would be required in each State / UT
as the obligation for collecting TCS would
be there for every intra-State or inter-State
supply. In order
to facilitate the obtaining of registration in each State / UT, the
e-commerce operator may declare the Head Office as its place of business
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necessary compliance as
mandated under
the law?
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for obtaining registration in that State / UT
where it does not
have physical presence.
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8.
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Foreign e-commerce operator do
not have place of business
in India since they
operate from outside.
But their supplier
and
customers are located
in India. So, in this scenario will the TCS
provision be applicable
to such e- commerce operator and
if yes, how will foreign
e-commerce operator
obtain registration?
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Where registered supplier
is supplying goods or services through a
foreign e-commerce operator to a customer in India, such foreign e- commerce operator
would be liable to collect
TCS on such supply and would be
required to
obtain registration in each State / UT. If the foreign e-commerce operator does
not have physical
presence in a particular State
/ UT, he may appoint
an agent on
his behalf.
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9.
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Is it necessary for
e- Commerce operators
who are already registered under GST
and have GSTIN,
to have separate registration
for TCS
as well?
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E-Commerce operator has to obtain separate
registration for TCS irrespective of the fact whether e-Commerce operator
is already registered under GST as a supplier or otherwise and has
GSTIN.
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10.
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What is meant by “net
value of
taxable supplies”?
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The “net
value of taxable supplies” means the aggregate value of taxable supplies of goods or services or both, other than the services on
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which entire
tax is payable
by the e-commerce
operator, made during any month by
a registered supplier through
such operator
reduced by the aggregate value of
taxable supplies returned to such supplier
during the said month.
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11.
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Whether value of net
taxable supplies to be
calculated at gross level or at GSTIN level?
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The value of net taxable supplies is calculated at
GSTIN level.
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12.
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Is every e-commerce
operator required to
collect tax on behalf of actual supplier?
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Yes, every e-commerce operator is required to collect tax where the supplier is supplying goods or services
through e-commerce operator
and consideration with respect to the supply is to be
collected by the said e-commerce operator.
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13.
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At what time should the
e-commerce operator collect TCS?
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TCS is to be collected once
supply has been made through the e-commerce operator
and where the business model is that the
consideration is to
be collected by the e-
commerce operator
irrespective
of the actual collection of the consideration. For
example, if
the supply has taken place through the
e- commerce operator
on 30th October, 2018 but the
consideration for the same
has been collected in the
month of November,
2018, then TCS for
such supply has to be collected
and reported in
the statement for the month
of October, 2018.
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14.
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Whether TCS
to be collected
on exempt
supplies?
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No, TCS is not required to be collected on
exempt supplies.
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15.
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Whether TCS
to be collected
on supplies
on which the recipient
is required to
pay tax on reverse charge basis?
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No, TCS is not required to be collected on supplies on which the recipient is required to pay
tax on reverse charge basis.
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16.
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Whether TCS is to
be collected in respect
of supplies made
by the composition
taxpayer?
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As per section 10(2)(d) of the CGST Act, 2017,
a composition taxpayer cannot make supplies through e-commerce
operator. Thus, question
of collecting TCS in respect of supplies made by
the composition taxpayer does not arise.
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17.
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Whether TCS is to
be collected on import of goods or
services or both?
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TCS is not liable to be collected on any supplies on which the
recipient is required to pay tax on reverse charge basis. As far as import of goods is
concerned since
same would fall within the domain
of Customs Act,
1962, it would
be outside the purview of TCS. Thus, TCS is
not liable to be collected on import
of goods or
services.
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18.
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Is there any exemption
on Gold, owing to the fact that
rate of GST is only 3%
and TCS on it would
erode the margin for the seller?
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No such
exemption
from TCS has been
granted.
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19.
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Whether payment of TCS
through Input Tax Credit of operator
for depositing TCS as per Section 52 (3)
of the CGST Act, 2017
is allowed?
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No, payment of TCS is not allowed through
Input Tax Credit of
e-Commerce operator.
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20.
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It is very common that
customers of
e- commerce companies return goods.
How these sales returns are going to be
adjusted?
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An e-commerce company is required to
collect tax only on the net value of taxable supplies made through it.
In other words, value
of the supplies which are returned
(supply return) may be adjusted from
the aggregate value of
taxable supplies made by each supplier (i.e. on GSTIN basis). In other words, if two suppliers “A” and
“B” are making supplies through an
e- commerce operator, the “net value of
taxable
supplies” would be calculated separately
in respect of “A” and “B”. If the value of returned
supplies is more than
supplies made on behalf
of any of such supplier during any tax period, the
same would be
ignored in his case.
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21.
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Under Section 52, e-
commerce operator collects TCS at the net of
returns. Sometimes sales return is more than sales and hence
can negative amount be
reported?
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Negative amount cannot be declared. There will be no impact
in next tax period also. In other words, if returns are more
than the supplies
made during any
tax period, the
same would be
ignored in current as well as future tax period(s).
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22.
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What is the time within which such TCS is to be remitted
by the e-commerce operator
to
the Government account?
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The amount
collected by the operator is to
be paid to appropriate government within 10
days
after the end of the month in which the
said
amount was so collected.
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23.
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How can actual suppliers claim
credit of TCS?
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The amount of TCS deposited by the operator with the appropriate Government
will be reflected in the electronic cash ledger
of the actual registered supplier (on whose account
such collection has been made) on
the basis
of the statement
filed by the operator in FORM GSTR-8 in terms
of Rule 67 of the CGST Rules, 2017. The said credit can be used at
the time of discharge of tax
liability by the actual supplier.
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24.
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How is TCS to be
credited in cash
ledger? Whether the refund of such TCS
credit lying
in
the ledger would
be allowed at
par with the refund provisions contained
in section
54(1) of the CGST Act,
2017?
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TCS collected is to be
deposited by the e-
commerce operator
separately under
the respectvive tax head (i.e. Central tax / State tax
/ Union territory tax / Integrated tax). Based on
the statement (FORM GSTR-8)
filed by the e-
commerce opertaor, the same
would be credited to the electronic cash ledger of the
the actual supplier
in the respective tax head. If the
supplier is not able to use the amount lying in the said
cash ledger, the actual
supplier may claim refund of
the excess balance lying in
his electronic cash ledger in
accordance with the
provisions contained in section 54(1)
of the CGST Act, 2017.
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25.
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Is the e-commerce
operator required to
submit any statement? What
are the details
that are required to be submitted
in the statement?
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Yes, every operator is required
to furnish a
statement, electronically, containing
the details of
outward supplies of goods or services effected through it, including the
supplies of goods or
services returned through it, and the
amount collected by it as TCS during a month
within 10 days after the end of such month in FORM GSTR-8. The operator is also required
to file an annual statement
by 31st day of December following the end of the financial year in which the tax
was collected in FORM GSTR-9B.
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26.
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Whether
interest
would be
applicable
on non-collection of TCS?
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As per section 52(6) of the CGST Act, 2017, interest is applicable on omission as well in case
of incorrect particulars noticed. In such a case,
interest is applicable since it is a case of omission. Further penalty under section 122(vi)
of the CGST
Act, 2017 would also be leviable.
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27.
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What will be
the place of supply for e-
commerce operator
for recharge of talk time of
the Telecom Operator
/ recharge of DTH / in relation to
convenience
fee charged from the customers on booking
of air tickets, rail supplied through its
online platform?
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As per section 12(11)
of the IGST Act, 2017,
the address on record of the
customer with the
supplier of services
is the place
of supply.
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28.
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Under multiple
e- commerce model,
Customer books a Hotel via ECO-1 who
in turn is integrated with ECO-2 who
has agreement with the hotelier. In this case,
ECO-1 will not have any GST
information
of the hotelier. Under
such
circumstances,
which e-commerce operator should
be liable to collect TCS?
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TCS is to be collected by that e-Commerce operator who is making payment to the supplier for the particular supply
happening through it, which is in this case will be
ECO-2.
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29.
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Are there any
additional
powers available to tax
officers under
this Act?
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As per section 52(12) of the CGST Act, 2017, any authority not below the rank of Deputy Commissioner may serve a notice requiring the
operator to furnish the details of their supplies
of goods or services or both as well as stock of goods held by the
suppliers within 15 working days of the
date of service of such notice.
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