Frequently Asked Questions (FAQs) released by CBIC on TCS under GST

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The Central Board of Indirect Taxes and Customs (“CBIC”) has issued a set of 29 Frequently Asked Questions (FAQs) along with their Answers on topic relating to “TCS under GST” dated September 28, 2018 through which CBIC has clarified all the issue of TCS applicable to e-commerce operator as defined as per Section 2(45) of the CGST Act, 2017.

Some of the gist of key highlighted point which cover under the following FAQs are :-

  • 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
  • Every electronic commerce operator has to obtain compulsory registration irrespective of the value of supply made by him
  • 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.
  • 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.
  • Registered supplier is supplying goods or services through a foreign e-commerce operator to a customer in India, such foreign ecommerce operator would be liable to collect TCS on such supply and would be required to obtain registration in each State / UT.
  • 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.
  • 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.
  • 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 ecommerce operator irrespective of the actual collection of the consideration.
  • TCS is not required to be collected on exempt supplies.
  • TCS is not required to be collected on supplies on which the recipient is required to pay tax on reverse charge basis.
  • 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.
  • TCS is not liable to be collected on import of goods or services.
  • payment of TCS is not allowed through Input Tax Credit of e-Commerce operator.
  • 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.

Complete FAQ can be accessed at: http://www.cbic.gov.in/resources//htdocs-cbec/gst/28092018-%20FAQs_on_TCS.pdf

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