TCS under GST | TCS for ecommerce | Tax Collected at Source under GST

What is TCS under GST?

According to provisions of TCS under GST for e-commerce operators, every e-commerce operator (Amazon, Flipkart etc.) will deduct 1% Tax Collected at Source (TCS) which comprises of 0.5% CGST and 0.5% SGST or 1% IGST before making payment to the e-commerce supplier or vendor. This tax will be collected on the net value of taxable supplies which is computed as follows:

The total value of taxable supplies of goods and/or services

Less: Taxable supplies returned to the suppliers through the e-commerce operator

= Net value of Taxable Supplies

How to enter TCS in Book Keeper?

Consider sale of mobile on ecommerce platform. Taxable value of mobile is ₹10,000 and GST on it is 12% which is ₹1,200 so the total amount payable by the customer will be ₹11,200.

Suppose ecommerce operator's commission is 10%. Also, they will deduct TCS@1%. This is how the GST invoice from ecommerce operator will look like:

• Amazon Fees = ₹100
• GST on Fees = ₹18
• TCS @ 1% on taxable amount as per new rule = ₹100 (1% of ₹10,000)
• Total Amount deducted = ₹100 + 18 + 100 = ₹218
• Total Amount which they will transfer in your account = ₹11,200 – ₹218 = ₹10,982

All entries for sale and commision paid need to be created as given here. For adjusting TCS amount, you need to create a separate Journal entry as follows:

Debit: TCS@1% (this account will be created under Duties & Taxes)

Credit: Ecommerce operator

The amount will be ₹100. 

How to claim TCS amount?

E-commerce operators have to file GSTR-8 by 10th of the next month in which the tax was collected. The TCS details submitted by the operators in GSTR 8 will be available to all the suppliers in GSTR 2A. The supplies will be available GSTR 2A after the due date of filing GSTR-8. The tax collected will be reflected in the electronic cash ledger of the respective suppliers. The suppliers can claim the credit accordingly after matching and reconciling their supplies with the details in GSTR 2A.