SIDDHANT SINGH RAJPUT 1

TDS & TCS UNDER GST

Section 51 Tax deduction at source (TDS)

1. Following Person Shall Deduct Tax u/s 51

 Central Govt./State Govt. → Department/Establishment
 Local Authority
 Government Agencies
 Public Sector Undertakings
 Society Established by CG/SG under Society Act
 An Authority/Board or other body
 Setup by an act of Parliament/State legislature
 Where 51% or more equity/control with Govt

2. When to Deduct TDS

Supply of taxable Goods & or Services under a CONTRACT exceeds 2,50,000 excluding
GST. Further TDS will be deducted even if the supplier is a composition Tax Payer.

3. TDS Rate
1% (CGST) + 1% (SGST) or 2% (IGST) on payment made or credited to supplier for taxable
goods & services. [Value shall be taken for deduction of TDS, exclusive of GST shown
in Invoices]

4. When not Required to Deduct TDS

 Value of taxable Supplies in a Contract Value ≤ Rs 2,50,000.
 Contract value > Rs 2,50,000 for both taxable as well as exempt supply, but the
value of taxable supply under contract ≤ Rs 2,50,000.
 Exempt Supplies.
 Supply Under RCM
 Payment made to Unregistered Supplier.
 Goods / Services Supplied between person notified to deduct TDS
 Location of Supplier & Place of Supply (In Same State & But Recipient's place in
other State)
Intra State Supply
CGST + UP - SGST
Suppliers Place Recipient Place
Uttar Pradesh Punjab
In Such Case TDS is deduct in form of UP- State tax that would not be possible to
be deducted by Recipient in Punjab. Hence TDS N.A. on Such transaction.
 SIDDHANT SINGH RAJPUT 2

Analysis
Location Of Supplier Place Of Supply Location Of Recipient TDS u/s 51
Uttar Pradesh Uttar Pradesh Uttar Pradesh Yes
Delhi Uttar Pradesh Uttar Pradesh Yes
Delhi Delhi Uttar Pradesh No
Chandigarh Chandigarh Chandigarh Yes
Chandigarh Chandigarh Ladakh No
Chandigarh Ladakh Ladakh Yes

5. Other Points
 Deductor Shall Deposit TDS Deducted by 10th of Succeeding month.
 TDS Certificate in form GSTR-7A shall be provided to deductee.
 TDS deducted shall reflect in Cash ledger of deductee.
 Failure to Deposit TDS- Interest @18% & Penalty.

Section 52 Tax Collected at source (TCS)

1. Who shall collect TCS

 Every E-Commerce Operator (Not an agent)
 Shall collect TCS from the Net Amount collected by ECO.

2. TCS Rate
0.5% (CGST) + 0.5% (SGST) or 1% (IGST) on Net Value of taxable Supplies.

3. Net Value = Value of G/S Supplied - Returned Supply

4. Eco Obligation
 Eco Shall File Statement in form GSTR-8 & Deposit TCS within 10 days from end of
month
 Eco Shall also file Annual Statement GSTR 9-B before 31st Dec following end of FY
Detailing
 Outward Supplies of G/S Including returns made
 Amount collected as TCS

5. TCS Not applicable in following cases

a. Supplies Own Product through website hosted by him
b. Supplies Different Vendor Product & amount collected by Vendor Only
c. Supply of Services notified under section 9(5)
d. Exempt Supplies
e. Recipient Required to pay tax on RCM.
f. Supply of Services by Supplier not liable to register.
 SIDDHANT SINGH RAJPUT 3

Clarifications
1. Clarification on TCS liability in case of multiple ECOs in one transaction

In the case of the ONDC Network (Open Network for Digital Commerce) there can be
multiple ECOs in a single transaction - one providing an interface to the buyer and the other
providing an interface to the seller.
Issue 1: In a situation where multiple ECOs are involved in a single transaction of supply of
goods or services or both through ECO platform and where the supplier-side ECO himself
is not the supplier in the said supply, who is liable for compliances under section 52
including collection of TCS?

Buyer Side Supplier Side

Buyer ECO ECO Supplier
Clarification:

Clarification: The compliances under section 52, including collection of TCS, is to be done by
the supplier-side ECO who finally releases the payment to the supplierfor a particular supply
made by the said supplier through him.

Issue 2 : In a situation where multiple ECOs are involved in a single transaction of supply
of goods or services or both through ECO platform and the Supplier-side ECO is himself
the supplier of the said supply, who is liable for compliances under section 52 including
collection of TCS?

Buyer Side Supplier Also

Buyer ECO An ECO

Clarification: In such a situation, TCS is to be collected by the Buyer-side ECO while making
payment to the supplier for the particular supply being made through it.

Other Provisions Related To TCS

1. Unregistered persons with aggregate turnover upto threshold limit permitted to

supply goods through an ECO.

Person not liable for registration u/s 22 shall be allowed to make supply Goods
through ECO subject to following conditions:
(i) Restricted from making inter-State supply of goods;
(ii) Restricted from making supply of goods through ECO in more than one
State/Union territory;
 SIDDHANT SINGH RAJPUT 4

(iii) Must be having PAN

(iv) Before making any supply of goods through ECO, declare on the common
portal:
a. PAN
b. address of business and
c. State/UT in which such persons seek to make such supply.
(v) enrolment number have been granted on the common portal on successful
validation of the PAN declared above.
(vi) such persons shall not be granted more than one enrolment number in a
State/UT.
(vii) no supply of goods shall be made by such persons through ECO unless such
persons have been granted an enrolment number on the common portal.

Obligations Of ECO where URP makes supply through it.

(i) ECO shall allow the supply of goods through it by the unregistered person only
if enrolment number has been allotted.
(ii) ECO shall not collect tax at source under section 52.
(iii) ECO shall furnish the details of supplies of goods made through it by the said
person in the statement in Form GSTR-8 electronically on the common portal.
Where multiple ECOs are involved in a single supply of goods through ECO platform,
“ECO” shall mean the ECO who finally releases the payment to the said person for the
said supply made by the said person through him.

2. Special procedure to be followed by ECOs in respect of supplies of goods through

them by composition taxpayers
a. The ECO shall not allow any inter-State supply of goods through it by the said
person.
b. The ECO shall collect TCS.
c. The ECO shall furnish the details of supplies of goods made through it by the said
person in the statement in Form GSTR-8 electronically on the common portal.

3. Section 9(5) Tax payable by ECO on Notified Services

The Government may, on the recommendations of the GST Council, notify specific
categories of services the tax [CGST/SGST/IGST] on supplies of which shall be paid by the
electronic commerce operator (ECO) if such services are supplied through it. Such
services shall be notified on the recommendations of the GST Council.
 SIDDHANT SINGH RAJPUT 5

The following categories of services supplied through ECO have been notified for this
purpose:
a) Transportation of passengers by a radio-taxi, motorcab, maxicab, motor cycle, or any
other motor vehicle except omnibus. (Eg. OLA/UBER/RAPIDO).
b) Transportation of passengers by omnibus except where person supplying such service
through ECO is company. (i.e. where company is supplying services through ECO, then
company is liable to pay GST under Normal Charge)
c) Providing accommodation in hotels, inns, guest houses, clubs, campsites or other
commercial places meant for residential or lodging purposes, except where the
person supplying such service through ECO is liable for registration. (Eg.
YATRA/GOIBIBO/TRIPADVISOR etc)
d) House-keeping services, such as plumbing, carpentering etc, except where the person
supplying such service through ECO is liable for registration. (Eg. URBAN-CLAP)
e) Restaurant service other than the services supplied by restaurant, eating joints etc.
located at specified premises.
Note: ‘Specified premises’ would mean premises providing hotel accommodation
service having declared tariff of any unit of accommodation above ` 7,500 per unit per
day or equivalent.
 Tax on above services supplied through ECO shall be paid by the ECO.
 All the provisions of the CGST/ IGST Act shall apply to such ECO as if he is the supplier
liable for paying the tax in relation to the supply of above services.
 Person liable to pay GST for above specified services when supplied through ECO

ECO Is Located In Taxable Territory Person Liable to pay tax is ECO

IF ECO is Not having Physical Presence Person Liable to pay tax is Person
in Taxable Territory representing ECO

IF ECO is Neither having Physical Person Liable to pay tax is the person
Presence nor any representative in appointed by the ECO for the purpose
Taxable Territory of Paying Tax
 SIDDHANT SINGH RAJPUT 6

Clarification regarding GST on Services Supplied by Restaurants Through ECO

Issue Clarification
Does ECOs have to collect TCS in No, ECOs will no longer be required to collect
respect of restaurant services so TCS and file Form GSTR-8 in respect of
notified? restaurant services on which ECO pays tax under
section 9(5)
Is ECO required to take separate No, as ECOs are already registered as per section
registration for paying tax on 24 (as a supplier of their own goods or services),
restaurant service supplied through there would be no mandatory requirement of
them? taking separate registration by ECOs for
payment of tax on restaurant service under
section 9(5).
Are ECO to pay tax on any restaurant Yes, ECOs will be liable to pay GST on any
services supplied through them? restaurant service supplied through them
including services supplied by an unregistered
person.
Does Supply of restaurant services to Yes, Such Supplies shall be include the
be included in aggregate turnover of aggregate value of supplies made by the
person supplying restaurant services restaurant through ECOs.
through ECO
Restaurant services provided through No, ECOs are not the recipient of restaurant
ECO are to be considered as inward service supplied through them. Since these are
supply for ECOs liable to RCM ? not input services to ECO, these are not to be
reported as inward supply liable to reverse
charge.
Is ECO Liable to raise invoice in Yes, The invoice in respect of restaurant service
respect of restaurant service supplied supplied through ECO under section 9(5) will be
through ECO? issued by ECO.
Can ECO utilize ITC to pay tax with No, the liability of payment of tax by ECO with
respect to “restaurant service” respect to restaurant service shall be discharged
supplied through ECO? in Cash.
Would restaurant service and goods Yes, the invoice in respect if restaurant service
or service other than restaurant supplied through ECO will be issued by ECO. And
service sold by a restaurant to a for other supplies, supplier will be liable to issue
customer under the same order to be invoice for the same and ECO shall be liable to
billed differently? Who shall be liable deduct TCS from the amount collected for other
for raising invoices in such case? supplies made through it.