TCS FAQ | Pay4printz

TCS FAQ

As per the GST laws, an e-commerce operator is liable to collect 1% of the consideration paid to suppliers for supplies made through e-commerce marketplace. Therefore, consideration received for supplies through the e-commerce marketplace will be after deducting the requisite 1% of value of supply.

However, credit of TCS is available to the seller in his cash ledger on accepting the supplies declared by the e-commerce operator on the GST portal.

Thereafter, such amount will reflect as TCS credit in the electronic cash ledger and can be used for discharge of output GST liability.

In case of excess balance of TCS in cash ledger, the same can be claimed as refund from the Government as per Government rules.

What is Tax Collection at Source (TCS)?

As per section 52 of the CGST Act, 2017, the e-commerce operator, not being an agent, is required to collect an amount calculated at the rate not exceeding 1%, as notified by the Government on the recommendations of the council, of the net value of taxable supplies made through it, where the consideration with respect to such supplies is to be collected by such operator. The amount so collected is called as Tax Collection at Sources (TCS). TCS refers to the tax which is collected by the Electronic Commerce Operator (ECO) and to be remitted to SGST, CGST or IGST accounts of the respective sellers when sellers supplies goods or services through its portal and the payment for that supply is collected by the ECO.

What is the rate of TCS notified by Government ?

As per GST norms, E-commerce operator (Vedson Ecommerce Private Limited) has to withhold TCS 1% of Net Value of Taxable sales from sellers for any given online sale on Vedson |Platform and have to remit the same to Government on monthly basis. Rate of TCS is 0.5% under each Act (i.e the CGST Act, 2017 and the respective SGST Act/UTGST Act respectively) and the same is 1% under the IGST Act, 2017. GST provision require an e-commerce operator like Vedson to collect tax at source (TCS) at the rate of 1% will be deducted on taxable value of an order from the seller payout as per below rule. * In case of Intra-state supplies = 0.5% SGST and 0.5% CGST and * In case of Inter-state supplies = 1% IGST TCS will be deducted against taxable supplies only but not on non-taxable supplies. Vedson would be responsible for filing the electronic statement giving the details of outward supplies and returned goods/services made by such sellers along with the TCS amount collected on the consideration received by such sellers.

What is meant by “net value of taxable supplies” ?

The “net value of taxable supplies” means the aggregate value of taxable supplies of goods or services or both, other than the services on which entire tax is payable by the e-commerce operator, made during any month by istered supplier through such operator reduced by the aggregate value of taxable supplies returned to such supplier during the said month. Net value of Supplies means = Total taxable supply of goods or service in Total taxable supply of goods or services returned to the seller during the said month, ignoring any negative amount in case of sales return is more than sales for the tax period.

Can seller use TCS for paying the output tax liability?

Yes TCS remitted by ECO shall be credited to Cash Ledger and can be used for paying the output tax liability. For more information you have to check TCS rules with GST and Government Department time to time if there is any change in the rule or act.

Can seller take this TCS as input tax credit?

Yes TCS amount remitted by Vedson to Government will be available for sellers to get Input Tax Credit during sellers GST return filing.

How to calculate taxable value of an order?

Taxable Value = Selling Price – GST – Sellers share of discount

What Percentage amount will the TCS be deducted by Vedson?

As per GST norms, Vedson is liable to collect TCS 1% of Taxable Transaction Value from sellers for any given sale on Vedson and have to remit the same to Government. * In case of Intra-state supplies = 0.5% SGST and 0.5% CGST and * In case of Inter-state supplies = 1% IGST Vedson will collect TCS on the sales amount (exclusive of taxes) to be paid to the seller.

How can you avail the TCS credit?

TCS deposited by Vedson will reflect in the cash ledger of the seller on the basis of Vedson’s Filing. TCS in the cash ledger shall be eligible for utilization against tax liability in respect to the seller’s supplies.

How will TCS mechanism work in case of sales returns on Vedson?

Vedson under GST regime is required to collect TCS on the net taxable value of sale made by respective sellers. Hence, Vedson would collect taxes on net value, calculated by reducing sales returns from gross value of sales. Net Value of taxable supplies of goods and services = Value of goods or services sold by the seller during the month on which GST is payable – Sales Returns

How to match the TCS uploaded by E-commerce Operator with the sales of sellers?

Details of the amount collected by Vedson are furnished in its statement of account. Details of supplies are mentioned in Statement of account. This details seller has to match with the corresponding details furnished by the concerned seller official return for the same or any preceding calendar month. If details of tax collected by vedson and furnished in statement of account does not match with the sellers, the discrepancy shall be communicated to both Vedson and the seller. If the discrepancy isn’t rectified by the seller in sellers valid return, the value of such supply shall be added to the output liability of the seller for the calendar month succeeding the calendar month in which the discrepancy is communicated. The sellers shall be liable to pay the tax in respect to such supply along with interest, at the rate specified on the amount so added from the date such tax was due till the date of its payment, whatever interest and penalty is levied by government is liability of the seller and vedson will deduct that amount from the seller statement of account.

Is TCS applicable only on sales above cific threshold?

There is no threshold limit prescribed for TCS compliance and it will be applicable to all online sellers selling taxable products on Vedson Platform.

Will TCS be collected even if supply of goods or service is exempt or not subject to GST?

No, TCS will be collected only on taxable supplies. If goods or services sold on the marketplace are not subject to GST, TCS will not be collected.

By when will Vedson deposit the TCS amount to appropriate government authority?

The amount collected by the E-commerce operator is to be paid to appropriate government within 10 days after the end of the month in which the said amount was so collected.

How can seller claim credit of TCS?

The amount of TCS deposited by the E-commerce operator with the appropriate government authority will be reflected in the electronic cash ledger of the actual registered seller (on whose account such collection has been made) on the basis of the statement file by the e-commerce operator in FORM GSTR-8. The said credit can be used at the time of discharge of tax liability by the seller. Vedson will report details of TCS collected in GSTR-8 by 10th of the following month. Credit of TCS amount will reflect in seller’s GST Electronic Cash Ledger. The amount can be utilized for GST ouput liability, interest, penalty, fees or any other amount payable as per government rules time to time.

Will TCS be collected even if payment terms is COD?

Yes, TCS will be applicable for payment mode Cash on Delivery (COD) as well.

Whether registration is mandatory and whether TCS will be collected?

Sellers supplying taxable goods and services through the vedson marketplace will be required to compulsorily obtain GST registration with regular dealer status irrespective of the sales threshold. Therefore, Vedson will collcect TCS on net taxable supplies made by such seller on the Vedson marketplace.

Whether value of net taxable supplies to be calculated at gross level or at GSTIN level?

The value of net taxable supplies is calculated at GSTIN Level.

Can composition taxpayer make supplies through e-commerce operator?

No, position taxpayer cannot make supplies through e-commerce operator.

Example of how to collect and deposit TCS amount to the government authority by E-commerce operator?

Particular Amount in INR 1) Value of goods/services invoiced to customer for the month 100000 2) Value of goods/services returned by customer during the month 25000 3) Net taxable value on which TCS needs to be deducted (1-2) 75000 4) TCS to be deposited by Vedson to the government authority on 1% of Rs 75000 750

How will the amount receivable by seller from Vedson be determined?

Particulars Amount (in INR) A) Value of goods/services invoiced to customer during the month 1,00,000 B) GST charged on the value (assumed 18%) 18,000 C) Gross Value 1,18,000 D) Amount paid by customer and received by Vedson 1,18,000` E) TCS deducted by Vedson and remitted to government authority (1% on (A) 1,000 F) Fees Charged by Vedson (including GST) 10,000 G) Seller Payout (Amount remitted to seller by vedson) (C-E-F) 1,07,000 H) GST to be paid by seller (B-E) 17,000

What if seller do not have an outward GST liability in the month in which goods are returned? How will seller adjust the TCS Paid?

If seller does not have taxable outward supplies in the month in which supplies are returned, then seller should be eligible for adjusting excess TCS paid earlier, against future outward GST liability or refund of the excess balance of TCS lying in the electronic cash ledger.

How is the TCS collected by Vedson matched to supplies made by the seller in the return?

• Details of the supplies and the amount collected as TCS during a rendar month is furnished by Vedson in GSTR 8 return. • Such details will be matched with the corresponding details of outward supplies furnished by the seller. • If the details reported by Vedson do not match with the seller’s GST return, the discrepancy will be communicated by authorities to both Vedson and the sellers. • If the value reported by Vedson is more than the value furnished by the seller, and if such discrepancy of communicated is not rectified by the seller in their return, the value of such supply shall be added to the output liability of the seller. • The seller pay tax in respect of such supply for delay in payment of taxes.

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