E-commerce operators will have to register themselves in every state where their suppliers are located for collection of tax collected at source (TCS) and foreign companies can appoint an ‘agent’ on their behalf for securing such registration, the Central Board of Indirect Taxes and Customs (CBIC) has said. From October 1, e-commerce companies will have to deduct 1% TCS before making payments to suppliers.
The CBIC has come out with a list of 29 FAQs, to answer industry queries on the modalities to be followed by e-commerce operators for deducting TCS.
E-commerce operators have to obtain the separate registration for TCS irrespective of whether they are already registered under GST as a supplier or otherwise and have a GSTIN. The amount collected by the operator has to be paid to the government within 10 days after the end of the month in which the said amount was collected.
The CBIC said e-commerce companies, whether domestic or foreign, would have to register themselves in each state/union territory (UT) as the obligation for collecting TCS would be there for every intra-state or inter-state supply.
“In order to facilitate the obtaining of registration in each state / UT, the e-commerce operator may declare the head office as its place of business for obtaining registration in that state / UT where it does not have the physical presence,” the CBIC said.
In case of foreign e-commerce operators that do not have a place of business in India since they operate from outside but have suppliers and customers in the country, the CBIC said they would be liable to collect TCS on such supply and would be required to obtain registration in each state/UT.
“If the foreign e-commerce operator does not have the physical presence in a particular State / UT, he may appoint an agent on his behalf,” it added.
Clarifying on when e-commerce operators will have to collect tax at source, the CBIC said TCS is to be collected once supply has been made through the operator and where the business model is that the consideration is to be collected by the operator irrespective of the actual collection of the consideration.
Giving an example, the CBIC said if the supply has taken place through the e-commerce operator on 30 October 2018, but the consideration for the same has been collected in the month of November, then TCS for such supply has to be collected and reported in the statement for the month of October 2018.
The CBIC said every operator will need to furnish a statement electronically, containing the details of outward supplies of goods or services effected through it, including the supplies of goods or services returned through it, and the amount collected by it as TCS during a month within 10 days after the end of the month in the GSTR-8 form.
The FAQ also defined e-commerce operator as any person who owns, operates or manages the digital or electronic facility or platform for electronic commerce. E-commerce means the supply of goods or services or both, including digital products over a digital or electronic network.
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