Tcs Under Gst
Jun 03, 2019 By Admin
With GST, our Government has been trying to increase the tax base and implement a formal tax regime and in the efforts now comes TCS under GST.
Tax Collected at Source(TCS) now comes under the ambit of GST with effect from October 1st, 2018.
The move is aimed to keep a check on sellers on ecommerce platforms like Flipkart, Amazon, etc. Likewise, Public Sector Units have also been directed to collect TCS while making payments more than 2.5 lacs for services provided to them by private vendors. Although the final rate of tax is yet to be finalized, the current rate under CGST is 1% and 2% under IGST.
Tax Collection at Source (TCS) has similarities with TDS, as well as has distinctive features also. TDS refers to tax, which is deducted when recipient of goods or services makes some payments under a contract etc., while TCS refers to tax, which is collected by the electronic commerce operator when a supplier supplies some goods or services through its portal and the payment for that supply is collected by the electronic commerce operator.
The GST Counsel has directed the ecommerce platforms to deduct 1% TCS. The Operator shall do this by paying the supplier the price of the product/services, less the tax, calculated at the rate of 1%. The said amount will be calculated on the net value of the goods/services supplied through the portal of the operator.
The move isn’t supposed to have much impact on the buyers but would have direct impact on the vendors selling on ecommerce platforms and the operators as well. The companies would now have to quickly gear up for the new regime, get their Accounting/ERP software corrected to meet the new guidelines laid by the Government.
Every new move is supposed to have a set back for the industry but our country is going though a big changes in taxation system which is for good. The government kept this move in abeyance for quite some time to let GST settle down first. The move is suggested to have a negative impact and make life difficult especially for Start-Ups as suggested by the Industry Pandits as it’s guidelines lay similar to the previous version of TDS/TCS under VAT.
The guidelines are not yet clear as to whether the ecommerce companies will have to obtain registration certificate in each state where the vendors are supplying. Therefore the move would be a hassle for the ecommerce companies and vendors functioning on the. The government would have to be swift in laying guidelines and doing away with flaws to make their operations easy and better on such platforms.
Published by : RAKESH KANWAR & CO. For more news visit: http://www.rakeshkanwar.com