Section 52 of the CGST act relates with the provisions regarding collection of Tax Collected at Source (TCS). As per this section, every electronic commerce operator needs to collect tax from the suppliers of goods and services.
These suppliers sell goods or services through an operator’s portal and pay the operator for the sales made via his portal.
So, let’s understand who is an electronic commerce operator before discussing the procedure followed by such operators to file returns.
Who is an Electronic Commerce Operator?
As per section 2 (44) of the CGST act, electronic commerce means the supply of goods or services or both over digital or electronic network. The products sold also include digital products.
And as per section 2(45) of the CGST act, electronic commerce operator means any person who owns, operates or manages digital platform for electronic commerce. For instance, platforms like Amazon, Flipkart, Jabong etc are few of the many e-commerce operators functioning in India. These operators display products or services on their e – commerce portal. But such products or services are supplied to the end consumers by other suppliers.
This means that the consumers buy the displayed goods or services through these portals. Thus, the actual supplier supplies selected goods or services to the consumer. This is done once the consumer places the order for such goods or services on the portal. Furthermore, the e-commerce operator collects the payment from the consumer and gives the same to the concerned supplier. Finally, the operator deducts a specific amount of margin and commission from the net value of goods and services sold by a supplier through the portal.
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What is Tax Collected at Source?
According to section 52 of the CGST act, every e-commerce operator is required to collect an amount of tax not exceeding 1% from the suppliers of goods or services. This amount of tax is calculated on the net value of the taxable goods and services supplied through the e-commerce portal of the operator. Thus, the operator collects such a tax by deducting 1% from the price of the product or service sold by the supplier through the portal.
Thus, the rate of TCS is 0.5% under each act, that is CGST act and the respective SGST/UTGST act. And the rate of TCS under the IGST act remains 1%.
Say for example, a supplier sells a product priced at Rs. 1000 through an e-commerce portal of an operator. In this case, the operator would deduct tax at the rate of 1% of the net value of Rs. 1000. That is the amount of TCS collected is Rs. 100.
What is GSTR 8?
GSTR 8 is a monthly return furnished by every electronic commerce operator who is required to deduct Tax Collected at Source under GST. This return reflects details of the supplies made through e-commerce portal and the amount of tax collected from suppliers of goods and services. Furthermore, the operator can also make changes to the details of supplies furnished in any of the earlier period statements.
When is GSTR 8 Due?
The last date to file GSTR 8 is the 10th day of the month succeeding the month for which TCS is to be collected. Thus, the amount of tax that the operator collects also needs to be deposited by the 10th day of the following month during which such a collection is made. Furthermore, the operator is also required to file an annual statement in the prescribed format in GSTR 9B. This return needs to be filed by 31st December following the end of each financial year.
Now, the details filed by the operator in GSTR 8 are made available to the suppliers in part C of form GSTR 2A. These details are made available to the suppliers electronically on the common portal after the due date of filing form GSTR 8. Also, the operator can make corrections to the previous statements latest by the month of September following the end of the financial for which such a return is to be filed.
Penalty for not or Late Filing of GSTR 8
If the operator fails to file the return within the due date, a penalty of Rs 200 per day (Rs 100 each for CGST and SGST) is charged. This is subject to a maximum of Rs 5,000. Further, there is no fee for late filing of IGST.
Also, interest at the rate of 18% needs to be paid along with the late fee. This is calculated by the taxpayer on the amount of tax to be paid. The interest is calculated from the day succeeding the due date of filing such a return until the day tax is paid.
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Components of GSTR 8
Goods and Services Tax Identification Number (GSTIN) of the e – commerce operator collecting TCS under GST. Each person registered under GST is given state-wise, PAN based GSTIN number. This gets auto-populated at the time the deductor is filing return for GST.
2. Business Name
- Legal name of the e – commerce operator
- Trade name if any
3. Details of the Supplies made Through E-Commerce Operator
Table 3 of the form showcases details of the supplies made through the e – commerce portal by the operator and that attract TCS. This table contains two parts – 3A and 3B.
Part 3A displays the details regarding the gross value of the supplies made to the registered persons through the portal. Whereas, part 3B contains details regarding the gross value of supplies made to unregistered persons via the portal.
Furthermore, this table also shows the value of the supplies returned by such registered and unregistered persons. Thus, the net amount of supplies on which TCS needs to be collected is the difference between the supplies made and supplies returned.
4. Amendments to Details of Supplies in Respect of Any Earlier Statement
The e – commerce operator can make changes to the details regarding supplies made in the previous months under this section. This table has two parts – 4A and 4B.
In part 4A, the operator can make changes to the details of the supplies made to the registered persons in the previous periods. Whereas, in part 4B he can make changes to the details of the supplies made to unregistered persons in the previous returns.
Furthermore, this table also shows the value of supplies returned by such registered and unregistered persons during previous periods. Thus, the corrected net amount of supplies on which TCS needs to be collected is the difference between the supplies made and supplies returned.
5. Details of Interest
This table shows the amount of interest that an operator needs to pay on account of late payment of the TCS amount.
6. Tax Payable and Paid
Table 6 contains the details of the total amount of tax payable by an operator and the amount of tax actually paid by him till date. This table shows the details of tax payable and tax paid under different heads including integrated tax, central tax and state/UT tax.
7. Interest Payable and Paid
Interest at the rate of 18% needs to be paid along with the late fee. This is calculated by the taxpayer on the amount of tax to be paid. The interest is calculated from the day succeeding the due date of filing such a return until the day tax is paid. This table shows the details of interest payable and paid under different heads including integrated tax, central tax and state/UT tax.
8. Refund claimed from Electronic Cash Ledger
The tax that an operator collects gets credited to the electronic cash ledger of the supplier. These are the suppliers who sell goods or services through the electronic commerce portal of the operator. Thus, the supplier can claim credit of the tax collected. However, the supplier can claim the refund only when the total TCS liability is discharged.
9. Debit entries in Cash Ledger for TCS/interest payment [to be populated after payment of tax and submissions of return].
On filing of GSTR 8 by the operator, the details of TCS paid are reflected in part B of form GSTR 2A of the supplier on the common portal.
In the end, the return is verified by an authorized signatory. This authorized signatory must be a resident in India having a valid PAN number and who acts on behalf of the Non – Resident Taxable Person.