GST Impact on TCS

Tally Solutions | Nov-25-2019

• Introduction to TCS in GST
• When and who is liable to collect TCS in GST
• TCS in GST to be collected on what amount
• Rate of TCS under GST
• TCS under GST with example

Introduction to TCS in GST

In GST, the obligation to collect tax at source has been placed upon Electronic Commerce Operators and no other class of suppliers.

TCS refers to the tax which is collected by the e-commerce operator when a supplier supplies some goods or services through its portal and the payment for that supply is collected by the e-commerce operator. The e-commerce operator should collect the TCS at 1% from the suppliers.

When and Who is Liable to Collect TCS in GST?

The TCS provisions under GST explains that an e-commerce operator is the one who is required to collect (by way of deduction) tax from the payment to be made to the suppliers of goods and services, who had supplied such goods and services using e-commerce operator’s platform.

Such amount is required to be collected on earlier of the following two events:

• Time of credit of amount to the accounts of actual supplier of goods and/or services.
  
  
• Time of payment of amount to such suppliers - Tax has to be collected from the amount payable or paid to the supplier, representing consideration towards the supply of goods and/or services made through it.

TCS in GST to be Collected on What Amount

TCS under GST has to be computed on the net value of taxable supplies. For this purpose, the net value of taxable supplies computation shall be made in the following manner:

Rate of TCS Under GST

The operator shall collect tax @ 1% of the net value of taxable supplies made through it by other suppliers.

TCS Under GST with Example

A better understanding of TCS provision under GST could be claimed from the example given below :