TCS in GST u/s 52

[milan bamal]

Hello Team,

Definition as per Section 52 (Collection of tax at source)

(1) Notwithstanding anything to the contrary contained in this Act, every electronic commerce operator (hereafter in this section referred to as the 'operator'), not being an agent, shall collect an amount calculated at such rate not exceeding one per cent., as may be notified by the Government on the recommendations of the Council, of the net value of taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the operator.

As per above definition Electronic commerce operator collect TCS and deduct from payment.

So my question is that Electronic commerce operator should calculate TCS amount on basic value or including GST amount value(Bill Value).

*As in income tax act, TCS it is collected on the total invoice value*

What's procedure of calculation of TCS under GST

[YAGAY andSUN]

Great question — the procedure for calculating TCS (Tax Collected at Source) under Section 52 of the CGST Act differs from that under the Income Tax Act. Here’s the key clarification:

🔹 Under GST (Section 52 of CGST Act):

• The electronic commerce operator (ECO) is required to collect TCS on the net value of taxable supplies made through it excluding the value of GST.

✅ TCS under GST is calculated on the "net value of taxable supplies" — exclusive of GST.

This is different from Income Tax TCS, where it's generally collected on the gross invoice value (including taxes).

📌 How to Calculate TCS Under GST:

Let’s break it down with an example:

🧾 Sample Invoice:

• Basic Value of Goods: ₹10,000
• GST @ 18%: ₹1,800
• Invoice Total (Bill Value): ₹11,800

💡 TCS Calculation (Assuming 1% TCS rate):

• TCS is 1% of ₹10,000 (basic value) = ₹100
• Not on ₹11,800 (i.e., not on the amount including GST)

🔍 Clarification from CBIC (FAQs):

“TCS is to be collected only on the net value of taxable supplies, i.e., excluding the tax amount.”

This is clarified in the official CBIC FAQs on TCS under GST.

🧮 Formula:

TCS = (Basic Taxable Value – Returns/Refunds) × TCS Rate

*** 

[milan bamal]

Dear Sir,

Kindly refer CBIC clarification no as said by you

[YAGAY andSUN]

https://gstcouncil.gov.in/sites/default/files/e-version-gst-flyers/TCS%20MECHANISM.pdf

[milan bamal]

Dear Sir,

Last query

In explanation under section 51 related to TDS .They properly mentioned that (Bold words)

Explanation .-For the purpose of deduction of tax specified above, the value of supply shall be taken as the amount excluding the central tax, State tax, Union territory tax, integrated tax and cess indicated in the invoice.

But why not in Sec-52 TCS

Explanation .-For the purposes of this sub-section, the expression "net value of taxable supplies" shall mean the aggregate value of taxable supplies of goods or services or both, other than services notified under sub-section (5) of section 9, made during any month by all registered persons through the operator reduced by the aggregate value of taxable supplies returned to the suppliers during the said month.

What's logic behind this

[YAGAY andSUN]

https://icmai.in/TaxationPortal/upload/IDT/Article_GST/100.pdf

[YAGAY andSUN]

https://cbic-gst.gov.in/aces/Documents/faq-on-gst.pdf

GST Frequently Asked Questions (FAQs)

[YAGAY andSUN]

Through these abovementioned links you will be able to get the answers of your all queries regarding TCS.

[milan bamal]

thanks

[YAGAY andSUN]

Excellent observation — and you're right to notice the difference in language and explicitness between Section 51 (TDS) and Section 52 (TCS) of the CGST Act.

🧾 Summary of Your Observation:

• Section 51 (TDS) has a clear explanation stating:

"...value of supply shall be taken as the amount excluding central tax, state tax..."

• Section 52 (TCS) lacks this kind of direct clarification in the text of the Act itself — it just refers to "net value of taxable supplies" without explicitly stating whether it is inclusive or exclusive of GST.

💡 So, Why the Difference?

Here’s the rationale and logic behind this legislative drafting difference:

✅ 1. "Net Value of Taxable Supplies" Already Implies GST-Exclusive

• Under GST law, the term “value of taxable supply” (used throughout the CGST Act) is understood to mean the value before GST is added, i.e., exclusive of tax, unless otherwise specified.
• Section 15 of the CGST Act (Valuation section) makes it clear that “value of supply” does not include GST unless tax is included in the price and it's not shown separately.
• Therefore, the drafters assumed that "net value of taxable supplies" under Section 52(1) would be interpreted by default as exclusive of GST, making a separate explanation redundant.

✅ 2. Different Nature of TDS vs. TCS

• TDS (Section 51) is deducted by government departments or notified entities while TCS (Section 52) is collected by e-commerce operators.
• TDS is a more formal withholding at the time of payment, and since departments may need clearer instructions, the Act is more explicit.
• TCS under Section 52 is collected by tech-based operators (like Amazon, Flipkart), who usually work with tax professionals and automated systems — so the expectation may be that they refer to definitions from Section 15 and other interpretations.

✅ 3. Clarified via Rules and FAQs, Not the Act

• While Section 52 lacks a GST-exclusion explanation in the bare Act, it **has been clarified via:
  • CBIC Circulars
  • FAQs on TCS
  • GST Rules**

These clarify that TCS is to be calculated on the basic taxable value, excluding GST.

So the legislative silence in Section 52 is filled by interpretive guidance and contextual understanding, whereas Section 51 spells it out to avoid ambiguity for government bodies.

📌 TL;DR:

• Section 51 includes a direct explanation because TDS involves more varied government deductors.
• Section 52 doesn't restate the exclusion of GST in the "net value" definition because it's already implied by standard GST valuation principles.
• The absence is a drafting choice, not a substantive difference in tax treatment.

***

AI Summary

Electronic Commerce Operators Must Calculate TCS on Net Taxable Value Excluding GST Under Section 52 Guidelines A discussion forum explores Tax Collected at Source (TCS) under Section 52 of the GST Act. The key issue is calculating TCS on electronic commerce transactions. Participants clarify that TCS should be calculated on the net taxable value, excluding GST, which differs from Income Tax TCS calculations. The discussion highlights the legislative nuances in defining taxable value and provides practical calculation guidance for electronic commerce operators.