GST on e-commerce: Online travel agents liable to deduct 1% tax at source

In cases where someone is selling their products, there is no requirement to collect tax at source

Online travel agents fall into the category of e-commerce operators and can deduct 1 per cent tax collected at source (TCS) under the GST, the Central Board of Excise and Customs (CBEC) said on Tuesday.

"Online travel agents providing services through digital or electronic platform will fall under the category of e-commerce operators (ECO) liable to deduct TCS under Section 52 of the CGST Act, 2017," CBEC said here in a fresh set of frequently asked questions (FAQs).

The e-commerce operator is required to collect an amount at the rate of one per cent (0.5 per cent Central GST plus 0.5 per cent State GST) of the net value of taxable supplies made through it. The amount so collected is called as TCS.

The benefit of threshold exemption of Rs 20 lakh turnover is not available to e-commerce operators and they are liable to be registered irrespective of the value of supply made by them.

"Threshold exemption is not available to e-commerce operators who are required to pay tax on notified services supplied through them," it said.

"Section 52(1) of the CGST Act, 2017 mandates that TCS is to be collected on the net taxable value of such supplies in respect of which the ECO collects the consideration," the CBEC said.

CBEC said that TCS is to be collected on the "net value of taxable supplies" made through an ECO and if the supply itself is not taxable, the question of TCS does not arise.

The net value of taxable supplies means the aggregate value of taxable supplies of goods or services or both, other than the services on which entire tax is payable by the e-commerce operator, made during any month by all registered persons through such operator reduced by the aggregate value of taxable supplies returned to the suppliers during the said month.

In cases where someone is selling their own products through a website, there is no requirement to collect tax at source.

The e-commerce operator needs to make the collection during the month in which the consideration amount is collected from the recipient.

The amount collected by the operator is to be paid to the government within 10 days after the end of the month in which amount was so collected.

The details of supplies furnished by every operator in his statement for the month will be matched with the corresponding details of outward supplies furnished by the supplier concerned in his valid return for the same month or any preceding month. Where the details of outward supplies declared by the operator in his statement do not match with the corresponding details declared by the supplier, the discrepancy shall be communicated to both persons.

The supplier in whose out tax liability any amount has been added, shall be liable to pay the tax payable in respect of such supply along with interest on the amount so added from the date such tax was due till the date of its payment.