GST – GST FAQ 3rd Edition – December, 2018 – 08 – 8. Electronic Commerce and Tax Collected at Source (The Questions adopted from the Frequently Asked Questions on TCS under GST released by Law Committee, GST Council on 28th September, 2018) Q 1. What is Electronic Commerce? Ans. 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. Q 2. Who is an e-commerce operator? Ans. 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. Q 3. What is Tax Collection at Source (TCS)? Ans. 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
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h e-commerce operator would be entitled to threshold exemption? Ans. 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. Q 7. Whether TCS is required to be collected by e-commerce operators on supply of services by unregistered suppliers through their portal? Ans. As per Section 24(ix) of the CGST Act, 2017, every person supplying goods or services through an e-commerce operator is mandatorily required t
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pply. 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 for obtaining registration in that State / UT where it does not have physical presence. It may be noted that each State/UT has indicated one administrative jurisdiction where all e-commerce operators having business (but not having physical presence) in that State/UT shall register. The proper officer for the purpose of registration of ECOs has also been notified by each State/UT. Q 9. 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? Ans. Where registered supplier is supplying goods or services through a foreign e-commerce operator to a customer in India, such foreign e-comme
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aggregate value of taxable supplies of goods or services or both, other than the services on 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. Q 12. Whether value of net taxable supplies to be calculated at gross level or at GSTIN level? Ans. The value of net taxable supplies is calculated at GSTIN level. Q 13. Is every e-commerce operator required to collect tax on behalf of actual supplier? Ans. 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. Q 14. At what time should the e-commerce operator collect TCS? Ans. TCS is to be collected once supply has been made through the e-commerce operator and where the business model is that the
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uestion of collecting TCS in respect of supplies made by the composition taxpayer does not arise. Q 18. Whether TCS is to be collected on import of goods or services or both? Ans. 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. Q 19. 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? Ans. No such exemption from TCS has been granted. Q 20. 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? Ans. No, payment of TCS is not allowed through Input Tax Credit of e-Commerce operator. Q 21. It is very common that customers of e-commerce companies return
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e during any tax period, the same would be ignored in current as well as future tax period(s). Q 23. What is the time within which such TCS is to be remitted by the e-commerce operator to the Government account? Ans. 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. Q 24. How can actual suppliers claim credit of TCS? Ans. 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. Q 25. 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 provi
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s 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.. Q 27. Whether interest would be applicable on noncollection of TCS? Ans. 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. Q 28. 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 tickets supplied through its online platform? Ans. As per section 12(11) of the IGST Act, 2017, the ad
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operators who have been unable to obtain registration in the month of October, 2018 but have already collected TCS for the said month have expressed challenges in relation to the filing of such details in GTSR-8. It has beenasked as to how these details are to be furnished on the common portal? Ans. E-commerce operators, who have been unable to obtain registration in the month of October, 2018 but have already collected TCS for the said month, may furnish the details of TCS collected in the month of October, 2018 in the first return in FORM GTSR-8 to be filed after obtaining registration. Q 32. We purchase goods from different vendors and are selling them on our website under our own billing. Is TCS required to be collected on such supplies? Ans. No. According to Section 52 of the CGST Act, 2017, TCS is required to be collected on the net value of taxable supplies made through it by other suppliers where the consideration is to be collected by the ECO. In this case, there are two trans
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by multiple persons. The registered person shall have to comply with the requirements of maintaining records as per section 35 of the CGST Act, 2017 and Rules 56 to 58 of the CGST Rules, 2017. Q 34. I am a supplier, supplying my own products through a website hosted by me. Do I fall under the definition of an electronic commerce operator. Am I required to collect TCS on such supplies? Ans. As per the definitions in Section 2 (44) & 2 (45) of the CGST Act, you will come under the definition of an electronic commerce operator. However, according to Section 52 of the Act, ibid, TCS is required to be collected on the net value of taxable supplies made through it by other suppliers where consideration is to be collected by the ECO. In cases where someone is selling their own products through a website, there is no requirement to collect tax at source as per the provisions of this section. These transactions will be liable to GST at the prevailing rates. Q 35. There are cases where the
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