Home » GST » Articles » TCS under GST : E-Commerce Operator

e-commerceEvery electronic commerce operator (e-commerce operator), not being an agent, is required to collect an amount calculated at the rate of one percent (1%) of the net value of taxable supplies made through it where the consideration with respect to such supplies is to be collected by the operator.

Terms related to electronic commerce under GST :

1.‘electronic commerce’ means supply of goods and/or services including digital products over digital or electronic network;

2.‘electronic commerce operator’ means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce;

3.’net value of taxable supplies‘ shall mean the aggregate value of taxable supplies of goods or services, other than services notified under sub-section (4) of section 8, made during any month by all registered taxable persons through the operator reduced by the aggregate value of taxable supplies returned to the suppliers during the said month.

From the above definition it appears that where the supplier of services is an unregistered person the e-commerce operator is not required to collect tax in respect of such supplies. This can create lot of problems because the e-commerce operator will have to maintain a database of registered and unregistered suppliers and if they insist on mandatory registration than it will put unnecessary burden on very small suppliers.

Another problem would the use of the phrase “where the consideration with respect to such supplies is to be collected by the operator” because many times the consideration is collected directly by the suppliers of taxable supplies in cash. For example Ola or Uber drivers receive cash payments at times from customers. In these cases going by the aforesaid phrase there are going to be implementation issues because by authority of law they are not authorised to collect tax and will have design their infrastructure support systems accordingly.

The tax collected above has to be paid to the appropriate government within 10 days of the end of the month in which collection is made.

Every operator who collects the amount as above described shall 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 during a month in FORM GSTR-8 within 10th day of the next month.

The supplier who has supplied the goods or services through the operator shall claim credit, in his electronic cash ledger, of the amount collected and reflected in the statement of the operator furnished as above.
Any authority not below the rank of Joint Commissioner may serve a notice, either before or during the course of any proceeding under this Act, requiring the operator to furnish such details relating to—

  1. supplies of goods or services effected through such operator during any period, or
  2. stock of goods held by the suppliers making supplies through such operator in the godowns or warehouses, by whatever name called, managed by such operators and declared as additional places of business by such suppliers – as may be specified in the notice.

Every operator on whom a notice has been served as above shall furnish the required information within fifteen working days of the date of service of such notice.

Any person who fails to furnish the information required by the notice served be liable to a penalty which may extend to twenty-five thousand rupees.

The Ministry of Finance has delayed the provisions related to TDS (Tax deducted at source) and TCS (Tax collected at source) for e-commerce players.
As per a notification issued by, the government that the provisions of “TDS (Section 51 of the CGST/SGST Act 2017) and TCS (Section 52 of the CGST/SGST Act, 2017) will be brought into force from a date which will be communicated later.”

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