Regarding Tax Collected at Source (TCS)

In this post, we want to answer a few key questions about the Tax Collected at Source (TCS) component of GST:

Q. What is Tax Collected at Source (TCS)?
As per the draft GST law, e-commerce marketplaces, such as Amazon will have to deduct 1% of the pre-tax transaction value and remit it to the government.  This TCS will be applicable net of returns, rejects and undelivered shipments and will be remitted to the government before the 10th of the next calendar month.

Q. Is Tax Collected at Source (TCS) applicable to all forms of retail?
As per the draft GST law, Tax collected at source is applicable only to online marketplaces (e.g. It is not applicable to offline sales.

Q. What do sellers need to do to get a full or partial refund of TCS?
The seller’s monthly tax filing (due by the 20th of the next calendar month) should reflect the TCS withheld, taxes due and any refund due back to the seller.  Based on this filing, any excess TCS that has been deducted will be refunded by the government.  As a result, we expect that every month working capital of up to 1% of monthly revenue will be locked up for a period ranging from 20-50 days.


Note: The content/ information mentioned above with respect to GST has been derived by Amazon Seller Services Private Limited ("Amazon") and is only for informational purposes. Amazon does not guarantee whatsoever as to the accuracy; completeness or usefulness of any information contained herein and assumes no responsibility for consequences resulting from the use of the information thereof. Please reach out to your Tax Consultant or GST service provider for any clarifications/ queries regarding GST.

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