Who is required to deduct TCS on GST – e-commerce operator w.e.f. 1.10.18

A clause was inserted under GST legislation for all the e-commerce aggregators. E-commerce aggregators are made responsible under the GST law for deducting and depositing taxation at the rate of 1 percent from each of the trade. Any dealers/traders selling goods/services online would find the payment after deduction of 1 percent tax. It is a significant change which would increase a great deal of compliance and management cost for online aggregators such as Flipkart, snapdeal, amazon etc.. They’d need to deposit the tax deducted from the 10th day of the next month.

Each of the traders/dealers selling goods/services online would should get enrolled under GST even if their turnover is less than 20 Lakhs for asserting the tax deducted by Ecommerce operators.

For example:

Mr. Kamal is a online trader who sells his goods online on Flipkart. He receives an order for Rs 100,000 inclusive of tax and commission. Flipkart charges a commission of Rs 1500. Flipkart would, therefore, need to deduct 1% tax (TCS) on the amount, including the money paid as commission (Rs. 1500) and GST (Rs. 18000 when GST @18%). Flipkart would thus be deducting tax for Rs 1000 (1% of Rs. 100,000).

Cases where TCS on GST is not required to be deducted

TCS necessary to be deducted by e-commerce operator @ 1% on net worth of taxable supplies made through it by other suppliers where the consideration concerning such supplies is to be collected by the operator!

Eg:- Suppose if Amazon is selling redmi mobile, than required to be deducted 1% TCS on behalf of redmi! Whereas if directly redmi selling mobile thought it’s own mi-app than no TCS!

Here amazon = e-commerce operator & redmi is a other supplier, hence TCS is applicable.

But if directly redmi selling without any engagement of e-commerce operator than there will be no TCS applicability.

Deposit of GST TCS and TCS Certificate

The amount of TCS deducted ought to be deposited with the govt from the deductor by the 10 th of the following month at Form GSTR 8 throughout the online portal The deductor will be liable to pay attention when the tax deducted is not deposited within the prescribed time limit as mentioned above.


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