Following are few FAQs in case of TCS:

QUE: Whether ECO is required to obtain registration in every State/UT in which suppliers listed on their e-commerce platform are located to undertake the necessary compliance as mandated under the law?

ANS: 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 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 ECO 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.

QUE: 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 ECO and if yes, how will foreign ECO obtain registration?

ANS: Where registered supplier is supplying goods or services through a foreign ECO to a customer in India, such foreign ECO would be liable to collect TCS on such supply and would be required to obtain registration in each State / UT. It may be noted that each
State/UT has indicated one administrative jurisdiction where all ECO 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. If the foreign ECO does not have physical presence in a particular State / UT, he may appoint an agent on his behalf.

QUE: Whether TCS is required to be collected by ECO on supply of services by unregistered suppliers through their portal?

ANS: Every person supplying goods or services through an ECO is mandatorily required to
register. However, vide Notification 65/2017-Central Tax dated 15th November, 2017 a person supplying services, other than supplier of services under section 9 (5) of the CGST Act, 2017, through an e-commerce platform were 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. Since such suppliers are not liable for registration, ECO are not required to collect TCS on supply of services being made by such suppliers through their portal.

QUE: What is the rate of TCS notified by Government?

ANS: Rate of TCS is 1%  (i.e. 0.5% CGST and 0.5% SGST/UTGST ) and the same is 1%  IGST.

QUE: Whether a supplier of goods or services supplying through ECO would be entitled to threshold exemption?

ANS: Every person supplying goods through an ECO shall be mandatorily required to register irrespective of the value of supply made by him.

QUE: Whether ECO is required to obtain registration in every State/UT in which suppliers listed on their e-commerce platform are located to undertake the necessary compliance as mandated under the law?

ANS: As per GST Act, 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 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 ECO 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.

QUE: Whether TCS is required to be collected by ECO on supply of services by unregistered suppliers through their portal?

ANS: Every person supplying goods or services through an ECO is mandatorily required to register. However, vide Notification 65/2017-Central Tax dated 15th November, 2017 a person supplying services, other than supplier of services under section 9 (5) of the CGST Act, 2017, through an e-commerce platform were 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. Since such suppliers are not liable for registration, ECO are not required to collect TCS on supply of services being made by such suppliers through their portal.

QUE: Foreign ECO 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 ECO and if yes, how will foreign ECO obtain registration?

ANS: Where registered supplier is supplying goods or services through a foreign ECO 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. It may be noted that each State/UT has indicated one administrative jurisdiction where all ECO 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. If the foreign e-commerce operator does not have physical presence in a particular State / UT, he may appoint an agent on his behalf.

QUE: Is it necessary for ECO who are already registered under GST and have GSTIN, to have separate registration for TCS as well?

ANS: Yes, Needs to be separate Registration

QUE:What is meant by “net value of taxable supplies”?

ANS:Aggregate value of taxable supplies of goods or services or both, other than the services on which entire tax is payable by the ECO, 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.

The value of net taxable supplies is calculated at GSTIN level.

QUE: Is every ECO required to collect tax on behalf of actual supplier?

ANS: Yes

QUE: At what time should the ECO collect TCS?

ANS: TCS is to be collected once supply has been made through the ECO and where the business model is that the consideration is to be collected by the ECO 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.

QUE:Whether TCS to be collected on exempt supplies?

ANS: NO

QUE: Whether TCS to be collected on supplies on which the recipient is required to pay tax on reverse charge basis?

ANS: NO, Not Required

QUE: Whether TCS is to be collected in respect of supplies made by the composition taxpayer?

ANS : A composition taxpayer cannot make supplies through ECO. Thus, question of collecting TCS in respect of supplies made by the composition taxpayer does not arise.

QUE: 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.

QUE : 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

QUE: 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 ECO. Paid in cash.

QUE: It is very common that customers of e-commerce companies return goods. How these sales returns are going to be adjusted?

ANS: 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.

QUE: U/S52, ECO collects TCS at the net of returns. Sometimes sales return is more than sales and hence can negative amount be reported?

ANS: 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).

QUE: How can actual suppliers claim credit of TCS OR apply for refund ?

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 OR may claim as refund if ITC is enough available with suppliers .

QUE: Is the ECO required to submit any statement? What are the details that are required to be submitted in the statement?

ANS: 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.

QUE: What will be the place of supply for ECO 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?

ANS: The address on record of the customer with the supplier of services is the place of supply.

QUE: 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 ECO should be
liable to collect TCS?

ANS: TCS is to be collected by that ECO who is making payment to the supplier for the particular supply happening through it, which is in this case will be ECO-2.

QUE: Certain ECO 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 been asked as to how these details are to be furnished on the common portal?

ANS : ECO, 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.

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Yogesh Parmar have vast knowledge in the field of Goods and Services Tax (GST). He is regularly conducting seminars on GST at various location for business personal to provide the knowledge about impact of GST on their business and how compliance should be made. He is founder of "www.etaxupdates.com" through which he is sharing his knowledge and latest amendments, circulars, notifications etc related to all type of taxes. He is also associated with some software development companies and providing advisory service and help to understand technical aspect of GST. He is also serving as functional manager as well as tester to those company which is developing software for GST.

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