The Central Board of Indirect Taxes and Customs (CBIC) has issued a set of Frequently Asked Questions (FAQ) on the topic, Tax Collection at Source ( TCS ) wherein the Board has clarified that TCS cannot be charged on exempted supplies, supplies taxable under the reverse charge mechanism (RCM) and imports and exports which would fall within the domain of Customs Act, 1962.
The FAQs clarified that where the registered supplier is supplying goods or services through a foreign e-commerce operator to a customer in India, such foreign e-commerce operator would be liable to collect TCS on such supply and would be required to obtain registration in each State / UT. If the foreign e-commerce operator does not have a physical presence in a particular State / UT, he may appoint an agent on his behalf.
“Every e-commerce operator is required to collect tax where the supplier is supplying goods or services through e-commerce operator and consideration with respect to the supply is to be collected by the said e-commerce operator,” it said.
It further clarified that TCS registration is mandatory for E-Commerce operator irrespective of the fact whether e-Commerce operator is already registered under GST as a supplier or otherwise and has GSTIN.
It was also clarified that the address on record of the customer would be the place of supply for e-commerce operator for recharge of talk time of the Telecom Operator/recharge of DTH / in relation to convenience fee charged from the customers on booking of air tickets, rail supplied through its online platform.
To a question on levy of TCS on Gold, the Board answered that there cannot be any exemption on Gold, owing to the fact that rate of GST is only 3% and TCS on it would erode the margin for the seller.
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