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TCS Mechanism under GST - Section 52 - GST Ready Reckoner - GSTExtract TCS Mechanism under GST Introduction Tax Collection at Source (TCS) has similarities with TDS, as well as has distinctive features also. TDS refers to tax which is deducted when recipient of goods or services makes some payments under a contract etc. while TCS refers to tax which is collected by the electronic commerce operator when a supplier supplies some goods or services through its portal and the payment for that supply is collected by the electronic commerce operator. We will discuss the exact nature of TCS with an example. There are many Electronic Commerce operators (ECO) [hereinafter referred to as an Operator], like Amazon, Flipkart, Jabong,e-bay etc. operating in India. These electronic commerce operators displays / lists on their portal products as well as services which are actually supplied by some other person to the consumer. The goods or services belonging to other suppliers are displayed on the portals of the electronic commerce operators and consumers buy such goods/services through these portals. On placing the order for a particular product/ services the actual supplier supplies the selected product/services to the consumer. The price/consideration for the product/services is collected by the Operator from the consumer and passed on to the actual supplier after deducting his commission by the Operator. The Government has placed the responsibility on the Operator to collect the tax at a rate of 1% from the supplier. This shall be done by the Operator by paying the supplier the price of the product /services, less the tax, calculated at the rate of 1%. The said amount will be calculated on the net value of the goods/ services supplied through the portal of the operator. (i) Supply of goods or services on own account by ECO where the ECO makes supplies of goods and/or services on his own account, he would be liable to discharge of GST in respect of supplies made by them as normal supplier. here the ECO purchase the goods and sells the same from its inventory like any other normal supplier. It is liable to comply with all the obligation under CGST, SGST and IGST, as the case may be. He is also liable for obtaining registration, payment of GST, filling of periodical returns etc. as any other supplier. (ii) Supply of goods or services as a facilitator The government may, on the recommendation of the council, specify categories of services (and not Goods) where ECO would be deemed as services provider (instead of actual services provider) and tax shall be paid by him accordingly. [ Section 9(5) of CGST Act and Section 5(5) of IGST Act ] The ECO, other than deemed specified as deemed supplier are required to collect an amount out of the consideration paid or payable to the actual supplier of goods or services under section 52 of CGST Act in respect of supplier of goods and/or services made through such operator, deposit with the government and provided the necessary information. When the ECO it self be deemed as supplier [ Section 9(5) of CGST Act and Section 5(5) of IGST Act ] The government may, on the recommendation of the council, by the notification, specify categories of services (and not Goods) the tax on which shall be paid by the ECO as if such services are supplied through it. all the provisions of the Act shall apply to such ECO as if it is the person liable for paying the tax in relation to the supply of such services. These provisions are similar to provisions applicable under the services tax where the aggregatr, such as Uber, Ola, Zomoto, Bigbasket Etc. instaed of the individual services provider, were deemed as supplier of services. Circumstances when ECO does not have physical presence in India Where registered supplier is supplying goods or services through a foreign e-commerce operator 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 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. If the foreign e-commerce operator does not have physical presence in a particular State / UT, he may appoint an agent on his behalf.
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