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Since the goods and services tax came into effect, a lot has changed. All businesses have to register for GST. Getting registered for GST has many benefits, one of which is that it makes doing business a lot easier. Still, the businessmen want to know a few things. One of these important parts is TCS under GST.
Here are some of the most common questions about how TCS works under GST.
What is TCS?
TCS stands for the tax taken out at the source. When an e-commerce operator sells goods and services from a different company to customers, he has to charge 1% GST on the total price. This is called “tax taken at the source.”
Who is an e-commerce operator?
An e-commerce operator, or ECO, is someone who owns and runs a website where people can buy or sell goods or services, or both.
For example:
An e-commerce operator helps a seller (let’s say ABC Ltd.) sell his goods (say Amazon or Flipkart).
Let’s say that ABC Ltd. sells goods on the e-commerce portal that are worth 45 lacs.
In this case, the GST will be 45,000, which is 1% of the value of the goods. So, ABC Ltd. will get 44,500,000.
The ECO will have to get 45,000, which he will give to the government.
What is the rate applicable under TCS?
After TCS @1% is taken out, the dealers will get paid for their goods. It means that 0.5% CGST and 0.5% SGST are charged for sales within the same state. Under the IGST Act, TCS will be 1% when goods are moved between different states.
Which GST return is to be filed by Tax Collectors?
GSTR-8 must be filled out by businesses that do business online.
Whether TCS applies to ECOs located outside?
TCS applies to all ECOs, no matter where they do business. If both the person who sells the goods or services and the person who buys them are in India, then TCS will apply.
Where do the Non-resident ECOs get themselves registered?
All foreign businesses that do business online must register for GST in each state or union territory.
Each state and territory has its own administrative jurisdiction. All businesses that do business online have to register for GST in the area where they do business.
If the ECO is outside of India, he must hire a representative to sign up for GST in each State/UT on his behalf.
How do ECOs get a separate GST registration for TCS?
ECOs must file FORM GST REG-07 to get a separate GST registration for TCS in addition to their regular GST registration.
How will the supplier be able to claim TCS credit?
The TCS that the operator gave to the government is in the actual supplier’s electronic cash ledger (ABC Ltd). TCS is based on how the operator files his or her GST return on Form GSTR-8.
How is TCS entered in the electronic cash ledger?
GST Tax is deposited under the correct tax head (CGST, SGST, UTGST, or IGST) when it is collected at the point of sale by the electronic commerce operator.
So, when the operator files this GST return, the tax is credited to the supplier’s electronic cash ledger.
What is the time limit for TCS tax payment?
GST Tax is deposited under the correct tax head (CGST, SGST, UTGST, or IGST) when it is collected at the source by an electronic commerce operator.
So, when the operator files this GST return, the tax is put in the electronic cash ledger of the supplier.
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