According to CBEC, e-commerce operators (ECO) need to deduct 1 % TCS before making the payment to the supplier/seller. We are a SMB, all our supplier/service providers are unregistered individual under GST. According to Sec 206C of Income Tax Act, Definition of Seller also includes "Individual or HUF" if covered under Sec 44AB(Mandatory Audit). And according to Sec 44AB, Audit of accounts of Individuals is only mandatory if their total sales exceed 1 Crore Rupees. All our suppliers are dependent solely on the business with my company and most deal with us only. And none of them have exceed sales of Rs 20 Lakh(GST Threshold for Registration) or 1 Crore. Lets forget 1 Crore, In-fact, most of them are being paid for their supply of services - only around 5 Lakh average per year. So are we still liable under GST to collect 1 % TDS from the monthly payments made to our service providers, under GST?
First answer received in 10 minutes.
Lawyers are available now to answer your questions.
A trader dealing only in exempted goods or where his turnover is below Rs 20 lakh in the financial year, but not engaged in inter-state supplies, is not required to register under GST
2)The traders, who have turnover below Rs 20 lakh and supply goods and services within the state, can also go for voluntary registration to avail input tax credit
3) you are not required to collect 1 percent TDS from monthly payments made to service providers whose turnover is below Rs 20 lakhs
I am sorry. I was referring to TCS and not TDS as wrongly mentioned in the last line.
As per the law you are not required to collect 1% TDS from monthly whose turnover is less than Rs. 20 Lakhs.
Regards
Under the GST regime, e-commerce players are mandatorily required to deduct tax the rate of 1% of net value of taxable supplies. This is “Tax Collection at Source (TCS)” under the GST law and has to be deposited with the government.
1% TCS is mandatorily required to be deducted by the e-commerce sites.
Regards
Hi,
As per section 24 of the CGST Act, a person has to compulsorily register under GST if he sells through an e-commerce operator. Hence, all your suppliers have to register under GST.
Further, there is no limit for the provision of TCS. You will have to deduct TCS before making payment to them, from the date which will be notified.
Regards,
Keerthiga Sharma
M.Com., CA, LL.B
Dear Ms.Sharma., But whats happens if they dont register ? I have been making payments to them since 17 months. Some 5,000 per month, others 30,000 per month, some 1,00,000+ per month. Even if we request, they dont register. I do understand their predicament. But, what happens to the relationship between our SMB and them, legally, under GST ?
So are we still liable under GST to collect 1 % TDS from the monthly payments made to our service providers, under GST?
You are required to follow the GST norms in this regard and may have to collect or deduct the applicable GST if you are required to comply as per the GST rules.
As per law, Who is liable to deduct TDS under GST?
Following people are responsible for deducting tax-:
(a) a department or establishment of the Central or State Government, or
(b) local authority, or
(c) governmental agencies, or
(d) such persons or category of persons as may be notified, by the Central or a State Government on the recommendations of the Council.
For example: If the Finance department, Government of India, enters into a contract with Reliance then the department would be liable to deduct TDS.
If the total value of supply under a contract exceeds Rs 2.5 lakhs then the person/entity would be liable to deduct TDS.
I am sorry. I was referring to TCS and not TDS as wrongly mentioned in the last line.
A clause has been inserted under GST law for all the e-commerce aggregators. E-commerce aggregators are made responsible under the GST law for deducting and depositing tax at the rate of 1% from each of the transaction. Any dealers/traders selling goods/services online would get the payment after deduction of 2% tax.
All the traders/dealers selling goods/services online would need to get registered under GST even if their turnover is less than 20 Lakhs for claiming the tax deducted by Ecommerce operators.
As on the last week of June 2017, based on the feedback received from trade and industry, the government has decided to postpone provision relating to TDS (Section 51) and TCS (Section 52) of the CGST/State GST Act 2017, with the objective of ensuring smooth rollout of GST.
As per the Central GST (CGST) Act, the notified entities are required to collect TDS at 1 per cent on payments to suppliers to goods or services in excess of Rs 2.5 lakh. This provision has been kept in abeyance.
But whats happens if they dont register ? I have been making payments to them since 17 months. Some 5,000 per month, others 30,000 per month, some 1,00,000+ per month. Even if we request, they dont register. I do understand their predicament. But, what happens to the relationship between our SMB and them, legally, under GST ?
If they deduct the taxes but they do not deposit the same with the government, then on the basis of deduction they would be liable for legal action as per law in this regard.
1) the government has deferred implementation of a provision that required ecommerce players such as Amazon and Flipkart to deduct tax on payments made to their vendors from July 1, under the new Goods and Service Tax regime.
2) In addition, small businesses that sell through these ecommerce platforms don't have to register themselves immediately, the government said.
3)Ecommerce players had feared losing business as a large number of small suppliers were yet to register their operations as required under GST guidelines
4).. Ecommerce companies will not be required to collect 1% TCS (tax collected at source) while making payment to their suppliers for goods sourced under GST