TCS under GST by E-commerce Operator

Electronic commerce operator like amazon, flipkart are required to collect Tax Collection at Source (TCS) at the rate of one percent of the net sales of goods or services made through their platform. Tax is to be collected only on the amount which is collected by the operator itself.

Calculation of Net Sales

Net sales is equal to the sales made through the platform reduced by the amount of goods returned by customer. The sales of services on which e commerce operator is itself liable to pay GST under section 9(5) is not included in the net sales and thus no tax is to be collected on such amount. At present cab aggregators like ola, uber are notified under section 9(5). They are themselves liable to collect and deposit GST.

Also the net sales in this case include the amount of GST itself and also the commission of operator.

For example: If a supplier makes sales of Rs. 1,00,000 and then the products of Rs. 10,000 is returned by customers. The net sales comes to Rs. 90,000 and TCS @1% i.e Rs. 900 has to be deducted by operator while making payment to the supplier.

Payment of Tax and Statement Filing

The amount collected by operator as TCS is to be deposited within 10 days from the end of the month in which collection is made.

Also details of outward supplies made, the supplies which are returned and amount collected during the month is to be filed within 10 days from the end of the month. Such statement is to be filed in Form GSTR-8.

If the operator discovers any omission or incorrect particulars in a statement filed , other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars in the statement to be furnished for the month during which such omission or incorrect particulars are noticed, subject to payment of interest.

No such rectification of any omission or incorrect particulars shall be allowed after any of the following dates

  1. 10th October of the next financial year
  2. Actual date of furnishing of the relevant annual statement.

Also an Annual statement is to be filed for every financial year on or before 31st December following the end of the year.

Input Tax Credit to Supplier

The supplier who has supplied the goods or services through the e commerce portal can claim such amount as input tax credit in his electronic cash ledger. The information furnished by operator is made available to the supplier in Part-C of Form GSTR02A after the due date of filing GSTR-8.

If the details furnished by the e commerce operator and the supplier doesn’t match then the discrepancies will be communicated to both the parties.

If the discrepancy is not resolved by the supplier in his return or operator in his statement in the month in which discrepancy is communicated then such amount will be added to the output tax liability of the supplier. Such amount will be added to output tax liability of supplier only where the value of outward supplies furnished by the operator is more than the value of outward supplies furnished by the supplier and in the month succeeding the month in which the discrepancy is communicated. The supplier also needs to pay interest from the due date of payment to the date of its actual payment.

Notice by Officer

An officer not below the rank of joint commissioner may serve a notice to operator asking for information related to supplies of goods and services during any period and the stock of goods held by suppliers in godowns or warehouses managed by such operator and declared as additional places of business by such suppliers.

The operator has to furnished such information within 15 days of serve of such notice. If the e commerce operator fails to furnish such information then such operator is liable to penalty which may extend to Rs. 25,000.


This provision for e commerce portals may bring many hardships to the new and upcoming portals operating at small scale. A person selling through such e commerce operator has to register under gst regardless of the turnover. Government may bind the e commerce operator to match its total sales with GSTIN wise sales and thus ensures that only registered persons are working through e commerce operator. And therefore TCS is not necessary.

Also Read

TDS under GST

Source: GST E-flier

Prateek Agarwal

Prateek Agarwal

I am Practicing Chartered Accountant from Jaipur and in practice for more than 9 years. I writes mainly for GST and Finance.

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