GST TCS — E-Commerce Operator Compliance

Tax Collection at Source (TCS) for e-commerce operators is governed by Section 52 of the CGST Act, 2017. Every e-commerce operator (ECO) — other than an agent — through which suppliers make taxable supplies of goods or services must collect TCS on the net value of taxable supplies made through it, where the consideration for such supplies is collected by the operator.

The applicable rate was reduced from 1% (0.5% CGST + 0.5% SGST for intra-state supplies, or 1% IGST for inter-state supplies) to 0.5% (0.25% CGST + 0.25% SGST, or 0.5% IGST) with effect from 10.07.2024, pursuant to Notification No. 15/2024-Central Tax. "Net value of taxable supplies" means the aggregate value of taxable supplies of goods or services made through the operator by all registered persons, reduced by the aggregate value of taxable supplies returned during the month.

Registration and compliance consequences: suppliers making supplies through an e-commerce operator that is required to collect TCS must obtain GST registration under Section 24(ix), without the benefit of the turnover-based threshold exemption, except for specified categories of suppliers (e.g., certain small suppliers of services, and — per Notification No. 34/2023-Central Tax and related amendments — small goods suppliers using a special composition-linked exemption) permitted to supply through e-commerce operators without mandatory registration, subject to conditions. The operator must deposit TCS collected to the Government by the 10th of the month following the month of collection, and must file a monthly return in FORM GSTR-8. The supplier can claim credit of the TCS so collected in their electronic cash ledger upon the operator's GSTR-8 being filed, based on the details auto-populated on the common portal.

GST TCS is the tax collected at source that e-commerce operators must collect on the supplies made through their platforms. Under Section 52 of the CGST Act 2017, an e-commerce operator must collect TCS at the notified rate on the net value of the taxable supplies made through it, remit it to the government, report it in the GSTR-8, and issue the statement to the sellers so they can claim the credit. The collection is a layer of compliance that sits on top of the seller's own GST registration and returns.

The TCS is the tax that the platform collects on the seller's behalf. Every sale through the platform carries the collection, the GSTR-8 reports it, and the seller's credit ledger receives the TCS amount — the mechanism that keeps the seller's tax collected at source reconciled with the tax they pay. For the platform, the compliance is a system: the collection rate, the remittance, the GSTR-8, and the statements to the sellers, all under Section 52.

The cost of a broken TCS cycle is the mismatch: the TCS collected but not remitted or reported becomes a demand with interest under the Act, and the sellers whose statements are wrong carry a credit position they cannot reconcile. The e-commerce sector is one of the most audited positions in GST — the TCS trail is the record the department reads.

This service is for e-commerce operators and marketplace sellers. For the operators, we set up the TCS collection under Section 52, manage the remittance and the GSTR-8, and issue the seller statements; for the sellers, we reconcile the TCS shown in the GSTR-2B with the platform statements and claim the credit correctly in the returns.