Section 52 of CGST | TCS under GST with Example

Tax collected at source (TCS under GST) is given under section 52 of CGST act.

This section provides the provisions related to collection of tax by e-commerce operators and deposits the same to the government in time limit on behalf of sellers who sell their goods and / or services through their online platform.

There is no threshold limit of sale, means even if sale is of small amount then also provision of TCS under GST is applicable.

Let’s understand in detail the provisions of TCS under GST under section 52 of CGST:

What is the meaning of TCS under GST?

Tax collected at source (TCS) under GST is a collection of tax by an e-commerce operator from the consideration received by it on behalf of supplier of goods or services or both.

This provision applies in a situation when a supplier puts their goods or services on an online platform (i.e. e-commerce operator) for sale.

So e-commerce operator creates a link between seller and buyer when buyer purchases the goods or services from an online platform then he makes the payment to e-commerce operator and not directly to seller and then e-commerce operator after deducting its commission gives that consideration to seller.

So in whole such a transaction government puts the liability of e-commerce operators to collect TCS on behalf of sellers while remitting the consideration.

Example:

Mr. A is a seller. He put its goods on Amazon (e-commerce operator) for selling. Amazon displays their goods to buyers.

Suppose Mr. B purchases a product and makes the payment to amazon Rs. 10000, so while remitting the consideration to the seller for Rs.10000,  amazon will deduct its commission charges as well as TCS.

So in this way the government instead of collecting tax from such individuals sellers they collect tax on behalf of sellers from the one platform i.e. e-commerce operator.

Also Read: Section 51 of CGST | TDS under GST | with Example

 

Who is liable to collect TCS under GST?

E-commerce operators are liable to collect TCS under GST but following are the few exceptions of TCS with respect to services provided by an e-commerce operator:

• Hotel accommodation or clubs (in case suppliers are unregistered)
• Transportation of Passengers - radio taxi, motor cab or motorcycle.
• Housekeeping services (in case suppliers are unregistered) Housekeeping services like plumbing, carpentry etc.

 

What is the rate of TCS under GST?

E-commerce operators has to collect TCS @ 1% (means 0.5% for CGST and 0.5% for SGST in case of intra-state and 1% for IGST in case of interstate) means supplier will get consideration for supply of goods or services or both after deducting TCS @ 1% .

 

Whether supplier and e-commerce operator needs to be registered under GST? 

The e-commerce operator is compulsorily liable to get itself registered to collect TCS.

Every suppliers who supplies through e-commerce operator needs to get itself registered except those who make supplies which are notified under section 9(5) of CGST Act these are:-

• Hotel accommodation or clubs (in case suppliers are unregistered)
• Transportation of passengers – radio taxi, motor cab or motorcycle
• Housekeeping services (in case suppliers are unregistered)

So if suppliers supply these services then no need to get registered provided they do not cross the threshold limit of registration.

Also Read: GST- QRMP Scheme (Quarterly Return Monthly Payment Scheme)

  

What is the due date of depositing TCS under GST?

TCS under GST should be deposited to the appropriate government account within 10 days after the end of the month in which TCS collected.

Example:

TCS collected in September month need to be deposited till 10th October from the end of the September month.

TCS to be deposited to appropriate government account means:

• For IGST and CGST = Central government
• For SGST = State government 

 

How to take credit of TCS under GST?

Suppliers whose Tax was deducted can claim credit of TCS.

First of all, e-commerce operators file GSTR-8 by 10th of the next month in which TCS was collected.  Now the details in GSTR-8 will be shown in GSTR-2A to all the suppliers. Then suppliers can claim credit of TCS after reconciling their supplies with GSTR-2A.

If all the supplies get reconciled with GSTR-2A then suppliers can claim credit of TCS for those amounts which are reconciled. Tax collected will show in the cash ledger of the supplier.

Suppose any discrepancy found while reconciling and that discrepancy not rectified within the given time period then the amount will be added to the liability of the supplier. Then he has to pay the difference amount along with interest if any.

Also Read: Section 194DA: TDS on Life Insurance Maturity Amount

 

How to calculate TCS under GST?

TCS will be calculated on Net value of Taxable supplies.

Total value of Taxable supplies of goods and/or services (other than notified services in section 9(5))	----
Less: Total value of Returned Taxable supplies of goods and /or services	----
Net Value of Taxable supplies	----

 

Example:

Mr. A is a seller. He puts its goods on the Amazon online platform. If Mr. B purchases goods of Rs 200,000 but returns goods of Rs. 50,000 then Amazon collects TCS of 1% on Rs 150,000.

TCS =Rs. 150,000 * 1% = Rs. 1500

So Mr. A will receive Rs.148500 (Rs.150000-Rs.1500)

(Assuming Amazon not charging any commission)

 

Conclusion

Section 52 of CGST Tax collected at source (TCS under GST) provides the provisions related to collection of tax by e-commerce operator @1% on Intra-state and @1% on Interstate while remitting the consideration to sellers. So in this way the government instead of collecting tax from individual sellers, they collect tax from the one platform i.e. e-commerce operator (on behalf of sellers).