52.1.1 ECO shall collect GST @1% of taxable supplies made through it and consideration received by it

Question-1 [ICAI-F-Ch12-U2-Q1]

Whether the rate of tax of 1% notified under section 52 is CGST or SGST or a combination of both CGST and SGST?

52.1.1.1 Supplies made through ECO by other suppliers

Question-1 [ICAI-F-Ch12-U2-Q3]

State whether the provisions pertaining to tax collected at source under section 52 of CGST Act, will be applicable in below mentioned scenarios –

(a) Fitan sells watch on its own through its own website

(b) ABC limited who is dealer of Fitan brand sells watches through Flipkart, an electronic commerce operator

52.1.2 Meaning of Net Value = Taxable supplies through ECO  – supplies returned month

Question-1 [ICSI-P-D21-2A(iii)-5] [ICSI-P-D19-O-5(c)-5]

State the rate of tax for collection of tax at source applicable to electronic commerce operator (ECO) under the CGST Act, under the SGST Act and under the IGST Act, 2017. Also specify when and on which of the value the rate of tax for collection at source be applicable.

Answer

The rate of tax collection at source (TCS) is 0.5% under CGST Act, 2017; 0.5% under SGST Act, 2017 and 1% under IGST Act, 2017.

TCS would be on the net value of taxable supplies made through the electronic commerce where the consideration with respect to such supplies is to be collected by the electronic commerce operator.

The net value of taxable supplies is the aggregate value of taxable supplies of goods or services or both made during any month by all registered taxable persons through the operator as reduced by the aggregate value of taxable supplies returned to the suppliers during the said month.

52.1.3 TCS is not required to be collected in the following cases

Question-1 [ICAI-F-Ch12-U2-Q2]

Is every e-commerce operator required to collect tax on behalf of actual supplier?

Question-2 [ICAI-F-Ch12-U2-Q6] [ECO supplying goods as capacity of an agent]

A is an e-commerce operator supplying goods through its electronic portal in capacity of an agent. The goods belong to B and the consideration for such supplies is received by A and remitted to B as per the contractual arrangement. A requires your help in arriving at the rate at which tax shall be collected from the amount which is received by it against the supplies?

Answer

As per Section 52(1) of the CGST Act, 2017, the TCS provisions are not applicable in cases where the ECO is an agent of the supplier. In the present case, A being an ECO is supplying goods through the electronic portal in capacity of an agent and hence the liability to collect tax as per Section 52 shall not arise in this case.

Question-3 [ICAI-F-Ch12-U2-Q7] [Consideration received by supplier]

X booked a Hotel in Udaipur, Rajasthan through an e-commerce portal for an amount of Rs.25,000. As per the terms and conditions, the amount was payable at the hotel at the time of check in. Whether TCS provisions shall apply in the present case?

Answer

No, as per the provisions under Section 52 of the CGST Act, 2017 the TCS provisions shall trigger only when the ECO is receiving the consideration for supply from the recipient of supply. In the present case the supplier i.e. the hotel is directly receiving the consideration from the recipient of the services i.e. X. Hence, the present transactions shall not trigger the TCS provisions under Section 52.

52.2.1 Deposit of TCS with government within 10 days of next month in GSTR-8 return

Question-1 [ICSI-E-D20-O-93-1] [ICSI-E-D21-O-91-1]

Section 52 of CGST Act, 2017 specifies that electronic commerce operator to collect tax not exceeding------------- of the net value and to deposit within --------- of the expiry of the month in which he collected the tax.

(A) ½%; 10 days; (B) ½%; 15 days; (C) 1%; 15 days; (D) 1%; 10 days

52.8 Miscellaneous Question & Answer

Quesiton-1 [ICSI-P-D22-2(c)-5] [TDS/TCS]

From the following information of independent cases, your expert advice, with appropriate reasoning is sought on the applicability of TDS/TCS provisions of the CGST Act, 2017.

You shall also quantify the amount of TDS/TCS, as the case be, if the same is applicable.

Note: Rate is CGST, SGST and IGST are 9%, 9% and 18% respectively. All the amounts given are exclusive of taxes.

(i) Avis Fashions, a designer cloth dealer registered in the state of Rajasthan, effected supply through ‘FARE DEAL’, an electronic commerce operator (ECO). Net value of taxable intra-State supplies effected for the month of October, 2021 was Rs.2,00,000.

(ii) Tarun, a registered supplier in Maharashtra, was awarded a work contract by Government of Maharashtra amounting Rs.4,00,000. Of this, value of exempt supply was Rs.1,00,000.

Answer

(i) An Electronic Commerce Operator (ECO) is required to collect TCS - an amount @1% (CGST 0.5% and SGST @ 0.5%) of the net value of taxable supplies made through it by other suppliers. = Rs.2,00,000 x 0.5% = Rs. 1,000 (CGST) & Rs. 1,000 (SGST)

(ii) A State Government is required to deduct tax from the payment made to the supplier of taxable goods and/or services, where the total value of such supply (excluding GST) under a contract, exceeds Rs. 2,50,000.

TDS to be deducted in the given intra-State supply (since place of supply and location of supplier is in Maharashtra) is as follows:

= (4,00,000 - 1,00,000) × 1% = Rs. 3,000 (CGST) and Rs. 3,000 (SGST) TDS Applicable on Amount Excluding Tax.

Quesiton-2 [ICAI-F-Jan21-6(b)-5] [TDS/TCS]

From the following information of independent cases, your expert advice, with appropriate reasoning, is sought on the applicability of TDS/TCS provisions of the CGST Act, 2017.  You shall also quantify the amount of TDS/TCS, as the case be, if the same is applicable.

(i) Top Fashions, a designer cloth dealer and registered in the State of West Bengal, effected supply through 'QUICK DEAL', an electronic commerce operator. Net value of taxable intra-State supplies effected for the month of October 2019 was Rs.1,50,000

(ii) M/s Super Builders, a registered supplier in Tamil Nadu, was awarded a works contract by Government of Tamil Nadu amounting to Rs.4,30,000. Of this, value of exempt supply was Rs.1,00,000.
(iii) Tasty Caterers, a· registered supplier of Kerala, provided catering services in Kochi, Kerala to Government of Andhra Pradesh for its annual training camp held for its staff. Value of said services was Rs.4,50,000.

Answer

(i) An electronic commerce operator (ECO) is required to collect TCS - an amount @ 1% (CGST 0.5% and SGST @ 0.5%) of the net value of taxable supplies made through it by other suppliers.

= Rs.1,50,000 × 0.5% = Rs.750 (CGST) & Rs.750 (SGST)

(ii) A State Government is required to deduct tax from the payment made to the supplier of taxable goods and/or services, where the total value of such supply [excluding GST] under a contract, exceeds ` 2,50,000. TDS to be deducted in the given intra-State supply (since place of supply and location of supplier is in Tamil Nadu) is as follows:

= Rs. (4,30,000 - 1,00,000) × 1% = Rs.3,300 (CGST) Rs.3,300 (SGST)

(iii) Since, in the given case, the location of supplier and place of supply are in the same State, i.e., Kerala and location of recipient is in Andhra Pradesh, Andhra Pradesh Government is not required to deduct TDS although the total value of supply under the contract is more than Rs.2,50,000.

Note: In above question, it has been assumed that the value given is exclusive of GST, wherever applicable, since the rate of tax is not given in the question.