E-commerce businesses will have to register with each state to collect TCS

New Delhi: E-commerce operators will have to register in every state where their suppliers are located for tax collected at source (TCS) and foreign companies can appoint an ‘agent’ on their behalf to secure such registration, the Central Board of Indirect Taxes and Customs (CBIC) said on Wednesday. From October 1, e-commerce companies will have to deduct 1% TCS before making payments to suppliers.

CBIC has released a list of 29 frequently asked questions to answer industry queries regarding the rules that e-commerce operators should follow while deducting TCS.

E-commerce operators must get separate registration for TCS irrespective of whether they are already registered under GST as suppliers or not and have a GSTIN. The amount collected by the operator must be paid to the government within 10 days from the end of the month in which it was collected.

The CBIC said e-commerce companies, both domestic and foreign, will have to register with each state/union territory (UT) as the liability to collect TCS will be applicable on each intra-state or inter-state supply.

“In order to facilitate registration in any state/union territory, the e-commerce operator may declare its head office as the place of business for the purpose of obtaining registration in a particular state/union territory where it does not have any physical presence,” the CBIC said.

In case of foreign e-commerce operators who are not based in India as they operate from outside the country but have suppliers and customers in the country, the CBIC has said that they will be liable to collect TCS on such supplies and will be required to get registered in each state/union territory.

“If a foreign e-commerce operator does not have a physical presence in a particular state/union territory, it may appoint an agent on its behalf,” it added.

Clarifying when e-commerce operators will have to collect tax at source, the CBIC said TCS is to be collected once the supply is made through the operator and the business model is for the consideration to be collected by the operator irrespective of the actual collection of consideration.

Citing an example, the CBIC said if a supply took place through an e-commerce operator on October 30, 2018, but consideration for the same was collected in November, then TCS for such supply has to be collected and shown in the statement for October 2018.

The CBIC has said that every operator will have to submit a statement electronically, giving details of supplies of goods or services made through it, including supplies of goods or services returned through it, and the amount collected by it under TCS during the month, in Form GSTR-8, within 10 days from the end of the month.

The FAQ also defines an e-commerce operator as a person who owns, operates or manages a digital or electronic e-commerce facility or platform. E-commerce means the delivery of goods or services or both, including digital products, via a digital or electronic network.