The Central Board of Indirect Taxes and Customs (CBIC) has issued the TCS liability under Section 52 of Central Goods and Services Tax Act (CGST Act) in case of multiple E-commerce Operators in one transaction vide circular no. 194/06/2023-GST on July 17, 2023.
To provide clarity and promote consistency in the application of the law among field formations, the Board, utilizing its authority granted by section 168(1) of the CGST Act, hereby offers the following clarifications on the matter:
Issue 1: In a situation where multiple ECOs are involved in a single transaction of supply of goods or services or both through ECO platform and where the supplier-side ECO himself is not the supplier in the said supply, who is liable for compliances under section
52 including the collection of TCS?
Clarification: In such a situation where multiple ECOs are involved in a single transaction of
supply of goods or services or both through ECO platform and where the supplier-side ECO
himself is not the supplier of the said goods or services, the compliances under section 52 of CGST Act, including collection of TCS, is to be done by the supplier-side ECO who finally
releases the payment to the supplier for a particular supply made by the said supplier through him.
e.g.: Buyer-side ECO collects payment from the buyer, deducts its fees/commissions and remits the balance to Seller-side ECO. Here, the Seller-side ECO will release the payment to the supplier after deduction of his fees/commissions and therefore will also be required to collect TCS, as applicable and pay the same to the Government in accordance with section 52 of CGST Act and also make other compliances under section 52 of CGST Act.
In this case, the Buyer-side ECO will neither be required to collect TCS nor will be required to make other compliances in accordance with section 52 of CGST Act with respect to this particular supply.
Issue 2: In a situation where multiple ECOs are involved in a single transaction of supply of goods or services or both through ECO platform and the Supplier-side ECO is himself the supplier of the said supply, who is liable for compliances under section 52 including collection of TCS?
Clarification: In such a situation, TCS is to be collected by the Buyer-side ECO while making payment to the supplier for the particular supply being made through it.
e.g. Buyer-side ECO collects payment from the buyer, deducts its fees and remits the balance
to the supplier (who is itself an ECO as per the definition in Sec 2(45) of the CGST Act).
In this scenario, the Buyer-side ECO will also be required to collect TCS, as applicable, pay the same to the Government in accordance with section 52 of CGST Act and also make other compliances under section 52 of CGST Act.
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