12 Jul CBIC Reduces TCS Rate from 1% to 0.5% for E-Commerce Operators Effective July 10, 2024
Background:
Earlier, CBIC, via Notification No. 52/2018 – Central Tax dated September 20, 2018, mandated that Electronic Commerce Operators (ECOs), not being agents, must collect Tax Collected at Source (TCS) at a rate of 1% (0.5% CGST + 0.5% SGST/UTGST, or 1% IGST) of the net value of intra-State taxable supplies made through them by other suppliers, where the consideration for such supplies is to be collected by the ECOs.
In the 53rd GST Meeting of the GST Council held on June 22, 2024, in New Delhi, it was recommended to reduce the TCS rate to 0.5% (0.25% CGST + 0.25% SGST/UTGST, or 0.5% IGST) to ease the financial burden on suppliers making supplies through ECOs required to collect TCS on net taxable supplies under Section 52(1) of the CGST Act.
Notification:
CBIC, via Notification No. 15/2024 – Central Tax dated July 10, 2024, exercised its powers conferred by sub-section (1) of Section 52 of the CGST Act to amend the TCS rate as follows:
Before:
- TCS rate of 1% (0.5% CGST + 0.5% SGST/UTGST, or 1% IGST)
- Effective from September 20, 2018, to July 9, 2024
After:
- TCS rate of 0.5% (0.25% CGST + 0.25% SGST/UTGST, or 0.5% IGST)
- Effective from July 10, 2024
Similar notifications have been issued under the Integrated Goods and Services Tax Act, 2017 (“the IGST Act”) and the Union Territory Goods and Services Tax Act, 2017 (“the UTGST Act”).
Effect of the Notification:
CBIC has reduced the TCS rate from 1% (0.5% CGST + 0.5% SGST/UTGST, or 1% IGST) to 0.5% (0.25% CGST + 0.25% SGST/UTGST, or 0.5% IGST) of the net value of intra-State taxable supplies made through ECOs by other suppliers, where the consideration for such supplies is to be collected by the ECOs.
The CGST, IGST, and UTGST Notifications can be accessed at:
https://www.nyca.in/wp-content/uploads/2024/07/Notification_No._15_2024_–_CTITUT_10.7.2024.pdf
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