TCS (Tax collection at source)

In this article, we will be discussing in detail TCS, who is responsible for collection of TCS, Rates and it's Due date.

What is TCS?

Tax collection at source (TCS) is collected by an e-commerce operator when a supplier supplies certain goods or services through the operator's online platform. TCS is charged as a percentage of net taxable supply. The cumulative TCS tax amount for the month should be paid to the government on or before the 7th of the following month. If the seller collects an additional TCS amount, it can be claimed by the buyer.

Who is responsible for the collection of TCS?

An electronic commerce operator is responsible for collecting taxes while making taxable sales on behalf of other suppliers. In other words, when e-commerce operators pay the consideration collected to sellers, they will have to deduct an amount in the form of TCS and pay the net amount.

Services provided by e-commerce platforms:-

• Housekeeping services like plumbing, carpentry, etc. (unregistered suppliers)

• Hotel accommodation/clubs (unregistered suppliers)

• Transportation of passengers – radio taxi, motor cab, or motorcycle

When is liable to collect TCS

• The timing of credit of the amount in the accounts of the actual supplier of goods and/or services.

• The timing of payment of the amount to such suppliers - tax is paid from the amount due or paid to the supplier, considering the supply of goods and/or services made through it.

Rate of TCS Under GST

The operator will collect tax at the rate of 1% of the net worth of taxable supplies made through it by other suppliers. Rate notified in the notification number by CBIC 52/2018 under CGST Act and 02/2018 under IGST Act. TCS will be collected at 1%, i.e. 0.5% under CGST and 0.5% under SGST. Similarly, for transactions between states, the TCS rate will be 1%, that is, under the IGST Act.

Deposit TCS Due Date

TCS should be credited to the government's credit within 10 days from the end of the supply month.

Pay the collected tax in the following way:

1. IGST & CGST will be paid to the central government

2. SGST to respective state governments

Which form should be used to file TCS return?

E-commerce operators will have to file GSTR-8 by the 10th of next month, in which the tax was levied. This return will be filed only after the collected tax has been deposited in the respective credit of the Government.

What goods are covered under TCS? And at what rate?

Types of Goods	Tax Rates
Sale of Goods to a purchaser exceeding Rs. 50 Lakhs	0.01%
Timber wood under a forest leased or by any other mode	2.5%
Tendu leaves	5%
Forest to produce other than tendu leaves and timber	2.5%
Liquor of alcoholic nature, made for human consumption	1%
Minerals like lignite, coal, and iron or	1%
Purchase of motor vehicle exceeding Rs. 10 Lakhs	1%
Parking lot, Toll plaza and Mining and Quarrying	2%

Disclaimer: This article is intended for general consumption only. The information in the article was accurate at the time of publication, but it is subject to change due to changes in government rules and regulations. The contents of the blog may not be copied unless prior permission is obtained.

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