E-commerce marketplaces will have to deduct 1 percent TCS while making payments to their suppliers. (Source: BloombergQuint)

Tax Collected At Source Norms: E-Commerce Companies Will Have To Register In Every State

E-commerce operators will have to register themselves in every state where their suppliers are located for collection of tax collected at source, according to Central Board of Indirect Taxes and Customs. Foreign companies can appoint an agent on their behalf for securing such registration.

E-commerce companies will from Oct. 1 have to deduct 1 percent TCS before making payments to their suppliers. The CBIC has come out with a list of 29 frequently asked questions answering industry queries on the modalities to be followed by the e-commerce operators for deducting TCS.

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It said that e-commerce operators have to obtain a separate registration for TCS irrespective of whether they are already registered under Goods and Services Tax as a supplier or otherwise and have GST Identification Number. The amount collected by the operator is to be paid to the government within 10 days after the end of the month in which the said amount was collected.

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The CBIC said e-commerce companies, whether domestic or foreign, would have to register themselves in each state or union territory as the obligation for collecting TCS would be there for every intra-state or inter-state supply.

In case of foreign e-commerce operators, which do not have a place of business in India since they operate from outside but have suppliers and customers in the country, the CBIC said they would be liable to collect TCS on such supply and would be required to obtain registration in each state/union territory.

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Clarifying on when e-commerce operators will have to collect the tax at source, CBIC said TCS is to be collected once supply has been made through the operator and where the business model is that the consideration is to be collected by the operator irrespective of the actual collection of the consideration.