TCS and GSTR 8

by Isha Jagi Blogger

The same as Job Work, ecommerce transactions also have a distinct buy-sell arrangement, thus require particular attention from GST Law. In accordance with the section 52 of CGST Act 2017, someone who owns, manages or operates a E-commerce platform, is responsible to collect taxes while earning taxable sales on behalf of different suppliers of products or services, through his online platform, and therefore, the tax collected is called TCS i.e. Tax Collected at Source. The supply for TCS was deferred multiple occasions because the execution of GST before 1st October 2018 as it had been made important by GST Notification 51/2018-Central Tax outdated 13-9-2018

Let us dig deeper into the Critical aspects of GST TCS supply in India: Starting with the definition of an ecom operator to penalties, and this Guide will cover what you need to learn about TCS

The Operator

Any individual or business owning, managing or operating a E-commerce platform, supplying the internet platform for taxable sales of products and services possessed by other suppliers is referred to as E-commerce operator.

Applicability

· The applicability to get TCS collection is dependent on the following 3 variables:

· The individual applying is a documented E-commerce operator.

· Taxable sales secured from the operator on behalf of different suppliers (rather than for self-owned provides )

· An account in respect of these supplies is collected from the operator.

Registration

For the registration of this operator for a TCS collector, a program needs to be submitted in REG-07. Upon a comprehensive confirmation by a licensed officer, a registration certificate will be issued in FORM GST REG-06 in a period of 3 working days by the date of entry of this program.

The GST Rate

The E-commerce Operator accounts to accumulate tax @1% (i.e. 0.5percent CGST and 0.5percent SGST and 1 percent For IGST) of their net worth of taxable sales made via the internet platform from other suppliers.

Due Date for TCS Deposit

A documented TCS collector must deposit the collected amount in a period of 10 days following the close of the month where the TCS was collected.

Returns

An E-commerce operator needs to record monthly in Addition to annual returns, which may be achieved as follows:

Monthly Returns: The TCS collector must submit a TCS yield in shape GSTR-8 over 10 days following the end of the specified month.

Annual Returns: The e-commerce operator could file his annual returns via type GSTR 9B. The yearly yield has to be submitted by 31st of December after the end of each fiscal year, whereas the e-commerce operator should give reconciliation between financial accounting outcome and GST Returns. But for the fiscal year 2017-2018, this provision of filing GSTR 9B is deferred.

Credit Claim

Upon the filing of GSTR 8 from the E-commerce Operator, the assert credit shall automatically represented in Supplier's Electronic Cash Ledger, that the Supplier may assert and use it to get payments of taxation while still filing GSTR 3B. Supplier will even receive the TCS information auto-populated in GSTR 2A form.

Reconciliation

All suppliers will need to reconcile the equipment recorded by these into their GSTR 1 as well as also the provides details offered by e-commerce operators within their GSTR 8. Dependent on the auto-populated details out there in GSTR 2A, supplier should match the gross selling value, sales returns worth, internet sale values and tax levels with their information offered in GSTR 1. When there is a discrepancy in the worth of gear, the supplier might need to pay the differential quantity of output tax together with interest.

For the typical procedures of TCS, click here, even though you might discover other applicable notification here.

The concept of TCS (Tax Collection at Source) is not new and it has been in force since a long time. Recently the Finance Act, 2020 has expanded the provision to include sale of goods also under the purview of TCS. The new provision was earlier made applicable from 1st April 2020, but due to the unfortunate pandemic, it was deferred and now it is applicable with effect from 1st Oct 2020.

Simultaneously e-invoicing has also gone LIVE from 1st October 2020 for outward B2B invoices and certain other transactions. Hence, it becomes imperative to understand the effect of E-Invoicing on TCS transactions.

IRIS Business is a major GST Suvidha Provider (GSP) providing simple and effective GST Software(IRIS Sapphire) and E-way bill (IRIS Topaz) compliance. Schedule a demo now!