Power to collect Tax

Section 52 provides for Tax Collection at source, by e-Commerce [ECO] operator in respect of the taxable supplies made through it by other suppliers, where the consideration in respect of such supplies is collected by him.

TCS refers to the tax collected at source.

Section 52(1)

Notwithstanding anything to the contrary contained in this Act,

every ECO, not being an agent,

shall collect an amount @ 0.5% not exceeding 1%., as notified by the Gov,

of the net value of taxable supplies made through it by other suppliers

where the consideration with respect to such supplies is to be collected by the ECO.

Summary of notifications issued u/s 52(1)

Every ECO, not being an agent, has been mandated to collect TCS from the net value of taxable supplies made through it by other suppliers, whenever the ECO collects the consideration on behalf of the supplier.

Section 20 of IGST Act read with section 52

In case of TCS, the operator shall collect tax @1% of the net value of taxable supplies

Refer Section 2(45) for meaning of “e-commerce operator”

TCS Rate

1% IGST or 0.5% CGST + 0.5% SGST

ECO must not be an agent.

Question & Answer

Ex

Mr. X is a supplier selling his own products through a web site hosted by him. Whether he is required to collect TCS on such supplies?

As per section 2(45), Mr. X will come under the definition of an “ECO”.

However, according to Section 52, TCS is required to be collected on the net value of taxable supplies made through it by other suppliers where the consideration is to be collected by the ECO.

In cases where someone is selling their own products through a website, there is no requirement to collect tax at source as per the provisions of this Section. These transactions will be liable to GST at the prevailing rates.

Question & Answer

Ex

If we purchase goods from different vendors and are selling them on our website under our own billing. Is TCS required to be collected on such supplies?

No. According to Section 52, TCS is required to be collected on the net value of taxable supplies made through it by other suppliers where the consideration is to be collected by the ECO.

In this case, there are two transactions - where we purchase the goods from the vendors, and where we sell it through our website. For the first transaction, GST is leviable, and will need to be paid to our vendor, on which credit is available for us. The second transaction is a supply on our own account, and not by other suppliers and there is no requirement to collect tax at source. The transaction will attract GST at the prevailing rates.

Explanation to Section 52(1)

For this sub-section, “net value of taxable supplies” shall mean

aggregate value of taxable supplies of goods or/and services other than services notified u/s 9(5) made during any month by all RPs through the operator

(-) aggregate value of taxable supplies returned to the suppliers during the said month.

TCS must be collected on aggregate value of

(+) taxable supplies made through it (-) supplies returned

TCS are not required on services notified u/s 9(5).

Question & Answer

(i) on supply of services notified under section 9(5) of the CGST Act, 2017.

(ii) on exempt supplies

(iii) on supplies on which the recipient is required to pay tax on reverse charge basis.

(iv) ECO is an agent

(v) Consideration is directly received by supplier but not by ECO

Question & Answer

Section 52(2)

The power to collect the amount specified in sub-section (1) shall be without prejudice to any other mode of recovery from the operator.

The powers of ECO is restricted only to the extent of TCS under circumstances specified therein and nothing more.

Section 52(3)

TCS shall be paid to the Government by the operator

within 10 days after the end of the month in which such collection is made,

in such manner as may be prescribed.

TCS must be deposited by the 10th of the following month, during which such collection is made.

Ex

If the TCS has been collected in the month of July, the amount has to be remitted into the Government Treasury on or before 10th August

Question & Answer

Section 52(4) read with Rule 67(1)

Every operator who collects TCS

shall furnish a statement, electronically, containing the details of

outward supplies of goods or services or both effected through it,

including the supplies of goods or services or both returned through it, and

the amount collected u/ss (1)

during a month,

in GSTR-8 within 10 days after the end of such month.

ECO is required to furnish a monthly statement in GSTR-8 by the 10th of the following month.

[1][Explanation to Section 52(4)

Due date for furnishing the GSTR-8 for the months of Oct, Nov and Dec, 2018 shall be the [2][07th February, 2019]]

[3][Proviso to Section 52(4)

Commissioner may, for reasons to be recorded in writing, by notification, extend the time limit for furnishing the statement for such class of RPs as may be specified therein:

Provided further that any extension of time limit notified by the Commissioner of State/UT tax shall be deemed to be notified by the Commissioner.]

Section 52(6)

If any operator after furnishing a statement u/ss (4)

discovers any omission or incorrect particulars therein,

other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities,

he shall rectify such omission or incorrect particulars in the statement to be furnished for the month during which such omission or incorrect particulars are noticed, subject to payment of interest u/ss 50(1)

ECO can rectify any errors or omissions on already filed GSTR-8 in succeeding GSTR-8

Proviso to Section 52(6)

no such rectification of any omission or incorrect particulars shall be allowed

after the [4][thirtieth day of November] following the end of FY or

the actual date of furnishing of the relevant annual statement,

whichever is earlier.

ECO can rectify errors in statements filed, if any, latest by the return to be filed for the month of September, following the end of every financial year.

Annual return in GSTR-9B by ECO by 31^st Dec after the end of relevant FY

Section 52(5) read with rule 80(2)

ECO who collects TCS u/s 52(1)

shall furnish an annual statement in GSTR-9B

before 31^st of Dec following the end of such FY.

GSTR-9B shall contain details of

a) outward supplies effected through it, including supplies returned through it, and

b) TCS collected u/s 52(1) during the FY,

[5][Proviso to Section 52(5)

Commissioner may for reasons to be recorded in writing, by notification, extend the time limit for furnishing the annual statement for such class of registered persons as may be specified therein:

Provided further that any extension of time limit notified by the Commissioner of State tax or the Commissioner of Union territory tax shall be deemed to be notified by the Commissioner]

Section 52(7) read with Rule 67(2)

The supplier who has supplied the goods or services or both through the operator

shall claim credit, in his electronic cash ledger, of TCS collected and reflected in the statement GSTR-8 of the operator furnished.

The tax collected by the operator shall be credited to the cash ledger of the supplier who has supplied the goods/services through the Operator. The supplier can claim credit of tax collected and reflected in the return by the Operator in supplier’s electronic cash ledger.

Section 52(9) read with Rule 78

The following details relating to the supplies made through an ECO, as declared in GSTR-8, shall be matched with the corresponding details declared by the supplier in GSTR-1,

(a) State of place of supply; and

(b) net taxable value:

If the above details of outward supplies do not match,

the discrepancy shall be communicated to both persons in such manner and within such time as may be prescribed.

The details of the supplies submitted by ECO in the statements will be matched with the details of supplies submitted by all such suppliers in their returns.

If there is any discrepancy in the value of supplies, the same would be communicated to both of them.

Section 52(10)

Discrepancy communicated u/ss (9) and which is not rectified by

the supplier in his valid return or

the operator in his statement

for the month in which discrepancy is communicated,

shall be added to the output tax liability of the said supplier, where the value of outward supplies furnished by the operator is more than the value of outward supplies furnished by the supplier, in his return for the month succeeding the month in which the discrepancy is communicated in such manner as may be prescribed.

If such discrepancy in value is not rectified within the given time, then such amount would be added to the output tax liability of such suppler.

Section 52(11)

The concerned supplier, in whose output tax liability any amount has been added u/ss (10),

shall pay the tax payable in respect of such supply along with interest u/ss 50(1) on the amount so added from the date such tax was due till the date of its payment.

Explanation.—For this section, “concerned supplier” shall mean the supplier of goods or services or both making supplies through the operator.

The supplier will have to pay the differential amount of output tax along with interest.

Section 52(12)

Any authority not below the rank of Deputy Commissioner may serve a notice, either before or during the course of any proceedings under this Act, requiring the operator to furnish such details relating to—

(a) supplies of goods or/and services effected through such operator during any period; or

(b) stock of goods held by the suppliers making supplies through such operator in the godowns or warehouses managed by such operator

as may be specified in the notice.

Godown of ECO may be shown as additional Place of business of supplier

Supplier may hold stock in godowns or warehouses managed by ECO for those supplies which is to be made through such ECO.

 Supplier shall declare such places as additional places of business of suppliers.

An officer not below the rank of Deputy Commissioner can issue notice to an Operator asking him to furnish details relating to volume of goods/ services supplied, stock of goods lying in warehouses/ godowns, etc.

Section 52(13)

Every operator on whom a notice has been served u/ss (12)

shall furnish the required information within 15 working days of the date of service of such notice.

Section 52(14)

Any person who fails to furnish the information required by the notice served u/ss (12)

shall, without prejudice to any action that may be taken u/s 122,

be liable to a penalty which may extend to Rs.25,000.

Registration of ECO and supplier is covered in Section 24.

For guide on registration of supplier please refer Para 24.10 of guide on section 24.

For guide on registration of ECO please refer Para 24.11 of guide on section 24.

Question & Answer