Understanding TCS in GST: A Complete Guide for E-Commerce Sellers
GST UPDATES
5/19/20252 min read
Understanding TCS in GST: A Complete Guide for E-Commerce Sellers
By CA M.F. Khan
Expertise in GST, E-Commerce Compliance, and International Taxation
🔗 www.camfkhan.com
📘 What is GST TCS?
Tax Collected at Source (TCS) under GST refers to the tax that e-commerce operators (ECOs) such as Amazon, Flipkart, and Meesho are required to collect from the consideration payable to suppliers for goods or services sold through their platform.
🔄 Transaction Flow Example
📅 State-wise TCS Reporting – GSTR-8 (May 2025)
All ECOs are required to report state-wise TCS collections under Form GSTR-8. This must align with seller records to avoid mismatches.
⚠️ Mismatch Notices
Mismatches between GSTR-8 filed by the ECO and GSTR-1 by the supplier can trigger GST notices. Ensure reconciliation to avoid penalties.
✅ TCS Applicability
TCS applies when:
The seller transacts through an ECO.
The ECO collects payment on behalf of the seller.
TCS does not apply if:
The ECO only facilitates the sale without handling payments.
❌ Non-Applicability Scenarios
TCS is not applicable for:
ECOs notified under Section 9(5) (e.g., hotel booking, certain restaurant services).
Supplies from a seller’s own website.
Goods sold as an agent.
Composite supply from multiple vendors.
Exempt or import transactions.
📊 TCS Rate
CGST: 0.25%
SGST: 0.25%
IGST: 0.5% (inter-state)
➡️ Effective Rate: 0.5% of net taxable value.
📝 Filing Requirements
ECOs must:
File GSTR-8 by the 10th of every month.
Pay TCS using the e-Cash Ledger.
Sellers will find the TCS credit reflected in their electronic cash ledger.
🔍 TCS vs. Income Tax TDS (Section 194-O)
GST TCS is an indirect tax on supply.
Income Tax TDS u/s 194-O is 0.1% on gross sales and is an income tax obligation.
They are governed by different laws and require separate compliance.
Thank You
M.F. Khan & Associates
A CA firm based in India, with international associations in UAE and the USA.
We specialize in:
Indian EXIM Compliance
E-Commerce Export
Income Tax, Audit, GST
UAE Corporate Tax & VAT
USA LLC & UK VAT Services
📍 Visit us at www.camfkhan.com
