TCS Under GST Section 52: Complete Guide for E-Commerce Operators

Section 52 of the CGST Act, 2017, governs the collection of Tax at Source (TCS) by electronic commerce operators (ECOs), requiring them to collect a prescribed percentage (currently 0.25%) of the net value of taxable supplies made through their platforms by other suppliers, provided they collect the consideration. This provision ensures better compliance and transparency in the e-commerce sector.

It mandates timely monthly and annual filings via FORM GSTR-8, allows for rectification of errors within a defined timeframe, facilitates credit transfer to suppliers, and lays out procedures for discrepancy resolution, recovery, and penalties. Supported by relevant rules and forms (especially Rule 67 and FORM GSTR-8), Section 52 plays a vital role in integrating e-commerce transactions into the GST system and aids in seamless tax administration and reconciliation.

GST Section 52: Collection of Tax at Source (TCS) by E-commerce Operators – A Comprehensive Guide

The Goods and Services Tax (GST) regime in India incorporates a unique mechanism for electronic commerce operators to collect tax at source (TCS). This provision, enshrined in Section 52 of the Central Goods and Services Tax (CGST) Act, 2017, plays a crucial role in ensuring tax compliance within the rapidly growing e-commerce ecosystem. This article provides a detailed analysis of Section 52, incorporating all its sub-sections, relevant rules, forms, and key amendments.

Understanding Section 52: An Overview

Section 52 mandates electronic commerce operators (ECOs) to collect a specified percentage of the “net value of taxable supplies” made through their platform by other suppliers, where the consideration for such supplies is collected by the operator. This mechanism came into force on October 1, 2018, via Notification No. 51/2018-Central Tax.

Key Aspects of Section 52

Let’s break down the various sub-sections of Section 52 to understand its implications thoroughly:

Section 52(1): The Core Provision for TCS Collection This sub-section lays down the fundamental requirement for ECOs to collect tax at source.

• Who collects? Every electronic commerce operator (ECO), not being an agent.
• What is collected? An amount calculated at a specified rate (not exceeding 1%) of the net value of taxable supplies. As per Notification No. 52/2018-Central Tax, dated 20.09.2018, as amended by Notification No. 15/2024-Central Tax, dated 10.07.2024, this rate is currently notified at 0.25% for intra-State taxable supplies.
• When is it collected? When taxable supplies are made through the ECO by other suppliers and the ECO collects the consideration for such supplies.
• “Net value of taxable supplies” Explanation: This term is crucial. It means the aggregate value of all taxable supplies of goods or services (or both, excluding services notified under Section 9(5)) made by all registered persons through the ECO during a month, reduced by the aggregate value of taxable supplies returned to the suppliers during the same month.

Section 52(2): Power of Recovery This sub-section clarifies that the power to collect TCS does not restrict any other mode of recovery from the operator by the government.

Section 52(3): Timely Payment to Government The amount of TCS collected by the ECO must be paid to the Government within ten days after the end of the month in which the collection was made, in the prescribed manner.

Section 52(4): Monthly Statement Filing (FORM GSTR-8) Every ECO collecting TCS is required to furnish a monthly statement electronically.

• Contents: Details of outward supplies of goods/services effected through it, including returns, and the amount collected under Section 52(1) for the month.
• Form & Manner: In such form and manner as prescribed (specifically, FORM GSTR-8 as per Rule 67).
• Due Date: Within ten days after the end of such month.
• Provisos (Inserted w.e.f. January 1, 2020 by Finance (No. 2) Act, 2019):
  • The Commissioner may, for reasons in writing, extend the time limit for furnishing this statement for a specified class of registered persons by notification.
  • Any extension notified by the State or Union Territory Tax Commissioner is deemed to be notified by the Commissioner.
• Historical Note: The due date for furnishing the statement for October, November, and December 2018 was specifically extended to January 31, 2019.
• Example Extension: Notification No. 06/2025-Central Tax, dated 10.01.2025, extended the time limit for furnishing FORM GSTR-8 for December 2024 till January 12, 2025.

Section 52(5): Annual Statement Filing In addition to monthly statements, ECOs must also furnish an annual statement.

• Contents: Details similar to the monthly statement, but for the entire financial year.
• Form & Manner: In such form and manner as prescribed.
• Due Date: Before the thirty-first day of December following the end of the financial year.
• Provisos (Inserted w.e.f. January 1, 2020 by Finance (No. 2) Act, 2019):
  • Similar to Section 52(4), the Commissioner can extend the time limit for furnishing the annual statement on the Council’s recommendations, for a specified class of registered persons.
  • Any extension by State/UT Tax Commissioner is deemed to be notified by the Commissioner.

Section 52(6): Rectification of Omissions/Incorrect Particulars If an ECO discovers any omission or incorrect particulars in a monthly statement (other than those identified by tax authorities), they can rectify it.

• How: In the statement furnished for the month in which the omission/incorrect particulars are noticed.
• Interest: Subject to payment of interest as per Section 50(1).
• Proviso (Amended w.e.f. October 1, 2022 by Finance Act, 2022): No rectification is allowed after the thirtieth day of November following the end of the financial year or the actual date of furnishing of the relevant annual statement, whichever is earlier. (Previously, it was “due date for furnishing of statement for the month of September”).

Section 52(7): Credit for the Supplier The supplier who has made supplies through the ECO can claim credit for the TCS amount collected by the operator and reflected in the ECO’s monthly statement (GSTR-8) in their electronic cash ledger.

Section 52(8): Matching of Details The details of supplies furnished by the ECO in their monthly statement (GSTR-8) are matched with the corresponding outward supply details furnished by the concerned supplier in their returns (GSTR-1/GSTR-3B).

Section 52(9): Communication of Discrepancy If there’s a mismatch between the details furnished by the ECO (GSTR-8) and the supplier (GSTR-1/GSTR-3B), the discrepancy is communicated to both the ECO and the supplier.

Section 52(10): Addition to Supplier’s Output Tax Liability Where the value of outward supplies reported by the ECO is more than that reported by the supplier, and the discrepancy is not rectified by either party in their subsequent filings, the differential amount is added to the output tax liability of the supplier. This addition occurs for the month succeeding the month in which the discrepancy was communicated.

Section 52(11): Supplier’s Liability for Discrepancy The supplier, whose output tax liability has been increased due to a discrepancy under Section 52(10), is liable to pay the tax on such added amount, along with interest at the rate specified under Section 50(1), from the date the tax was due until the date of payment.

Section 52(12): Power to Call for Information from ECO An authority not below the rank of Deputy Commissioner can issue a notice to the ECO requiring them to furnish details relating to:

• Supplies of goods/services effected through the operator during any period.
• Stock of goods held by suppliers making supplies through the operator in godowns/warehouses managed by the ECO and declared as additional places of business by the suppliers.

Section 52(13): Furnishing Information by ECO Upon receiving a notice under Section 52(12), the ECO must furnish the required information within fifteen working days from the date of service of the notice.

Section 52(14): Penalty for Failure to Furnish Information Any person failing to furnish the information required by a notice under Section 52(12) is liable to a penalty which may extend to twenty-five thousand rupees, without prejudice to other actions under Section 122.

Section 52(15): Time Limit for Furnishing Statement (Inserted w.e.f. October 1, 2023 by Finance Act 2023) An operator is not allowed to furnish a statement under sub-section (4) after the expiry of a period of three years from the due date of furnishing the said statement.

• Proviso: The Government, on the Council’s recommendations, may allow an operator or a class of operators to furnish a statement even after the three-year expiry, subject to specified conditions and restrictions.

Explanation for Section 52: The term “concerned supplier” refers to the supplier of goods or services (or both) making supplies through the operator.

Relevant Rules and Forms for Section 52

The implementation of Section 52 is supported by specific rules and forms:

• Rule 67: Form and manner of submission of statement of supplies through an e-commerce operator. This rule prescribes the specifics for filing FORM GSTR-8.
• FORM GSTR-8: This is the primary statement used by e-commerce operators for Tax Collection at Source.
• Rule 142: Notice and order for demand of amounts payable under the Act. This rule outlines the procedures and forms related to demand and recovery, which could be relevant in case of discrepancies or non-compliance under Section 52. The associated forms include:
  • FORM GST DRC – 01: Summary of Show Cause Notice
  • FORM GST DRC – 01A: Intimation of tax ascertained as being payable under section 73(5)/74(5)
  • FORM GST DRC – 02: Summary of Statement
  • FORM GST DRC – 03: Intimation of payment made voluntarily or made against the show cause notice (SCN) or statement or intimation of tax ascertained through FORM GST DRC-01A.
  • FORM GST DRC – 04: Acknowledgement of acceptance of payment made voluntarily
  • FORM GST DRC – 05: Intimation of conclusion of proceedings
  • FORM GST DRC – 06: Reply to the Show Cause Notice
  • FORM GST DRC – 07: Summary of the order
  • FORM GST DRC – 07A: Summary of the order creating demand under existing laws
  • FORM GST DRC – 08: Summary of Rectification /Withdrawal Order

FAQs on Section 52 of CGST Act

What is Section 52 of the CGST Act?
Section 52 deals with the collection of Tax at Source (TCS) by electronic commerce operators on taxable supplies made through their platform.

Who is required to collect TCS under Section 52?
Every electronic commerce operator (ECO), not acting as an agent, who collects consideration on behalf of suppliers, must collect TCS.

What is the current rate of TCS under Section 52?
The current rate of TCS is 0.25% on the net value of taxable intra-State supplies, as per the latest notification.

What is meant by “net value of taxable supplies”?
It is the total value of taxable supplies made through the ECO by all registered persons during a month, minus the value of supplies returned during that month.

When did Section 52 come into effect?
It came into effect on October 1, 2018, via Notification No. 51/2018-Central Tax.

What form is used for filing TCS returns under Section 52?
FORM GSTR-8 is used for monthly filing by e-commerce operators collecting TCS.

What is the due date for filing FORM GSTR-8?
FORM GSTR-8 must be filed within 10 days after the end of the respective month.

Is there an annual filing requirement under Section 52?
Yes, ECOs must furnish an annual statement by 31st December following the end of the financial year.

Can the filing deadlines for GSTR-8 be extended?
Yes, the Commissioner may extend the deadline through a notification, based on specific reasons.

Can errors in GSTR-8 be rectified?
Yes, rectification is allowed before 30th November of the next financial year or the date of filing the annual statement, whichever is earlier.

What happens if there is a mismatch between the supplier and ECO data?
The discrepancy is communicated to both parties, and if not rectified, the differential amount is added to the supplier’s output tax liability.

Is the supplier entitled to credit of the TCS collected?
Yes, the TCS amount is credited to the supplier’s electronic cash ledger and can be used for tax payment.

What are the consequences if the supplier does not rectify a mismatch?
The unmatched amount is added to the supplier’s output tax liability, along with interest.

Who can demand additional information from the ECO?
A GST officer, not below the rank of Deputy Commissioner, can issue a notice to the ECO seeking details of supplies and stock.

What is the penalty for failure to furnish required information?
A penalty of up to ₹25,000 may be imposed for failure to furnish information as required under Section 52(12).

What is the time limit to file GSTR-8 after the due date?
The ECO cannot file GSTR-8 after three years from the original due date, unless an extension is granted by the Government on GST Council’s recommendation.

What is the relevance of Rule 67 in context of Section 52?
Rule 67 prescribes the manner and form (GSTR-8) for submission of TCS details by e-commerce operators.

Are there any supporting forms for recovery and rectification?
Yes, forms under Rule 142 such as GST DRC-01 to DRC-08 are used for notices, payments, and orders related to recovery and discrepancies.

Can an ECO claim refund for excess TCS paid?
Yes, if excess TCS has been deposited, the ECO may apply for refund as per general provisions of the GST Act.

Do ECOs collect TCS on exempted or nil-rated supplies?
No, TCS is only applicable on taxable supplies, not on exempt or nil-rated items.

Does Section 52 apply to services notified under Section 9(5)?
No, TCS is not applicable to services notified under Section 9(5), where the ECO is liable to pay GST directly.

What if the supplier does not report supplies made through ECO in their GSTR-1?
Mismatch will be detected, and the liability may be added to the supplier’s tax payable along with interest.

Is GSTR-8 filing mandatory even if no TCS was collected in a month?
Yes, the ECO must file a NIL return in GSTR-8 if no TCS was collected during a month.

Can an ECO revise a GSTR-8 return after filing?
No separate revision facility is available; rectifications must be made in a subsequent return before the allowed deadline.

Does Section 52 apply to cross-border e-commerce?
It applies only to supplies where both supplier and recipient are in India and the supply is taxable under GST.

What role does FORM GST DRC-03 play in TCS?
DRC-03 is used for voluntary payment of tax or payment in response to a notice, which can include TCS-related liabilities.

Section 52 of the CGST Act is a critical provision that brings e-commerce transactions under the GST ambit effectively, by placing the onus of TCS collection on the electronic commerce operators. This mechanism facilitates transparency, streamlines tax collection, and helps in reconciliation of supplies made through online platforms, thereby strengthening the overall GST framework. Adherence to its provisions, including timely filing of GSTR-8 and rectifying discrepancies, is paramount for both e-commerce operators and their suppliers.