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Dear Professional Colleagues,

Greetings of the Day !

The Central Board of Indirect Taxes and Customs (GST Policy Wing) issued Circular No. 194/06/2023-GST dated July 17, 2023 regarding Clarification on TCS liability under Sec 52 of the CGST Act, 2017 in case of multiple E-commerce Operators in one transaction.

Background

In the current platform-centric model of e-commerce, the buyer interface and seller interface are operated by the same ECO. This ECO collects the consideration from the buyer, deducts the TCS under Sec 52 of the CGST Act, credits the deducted TCS amount to the GST cash ledger of the seller and passes on the balance of the consideration to the seller after deducting their service charges.

In the case of the ONDC Network or similar other arrangements, there can be multiple ECOs in a single transaction - one providing an interface to the buyer and the other providing an interface to the seller.

Clarification

Issue 1: In a situation where multiple ECOs are involved in a single transaction of supply of goods or services or both through ECO platform and where the supplier-side ECO himself is not the supplier in the said supply, who is liable for compliances under section 52 including collection of TCS?

Clarification: Compliances under section 52, including collection of TCS, is to be done by the supplier-side ECO who finally releases the payment to the supplier for a particular supply made by the said supplier through him.

Issue 2: In a situation where multiple ECOs are involved in a single transaction of supply of goods or services or both through ECO platform and the Supplier-side ECO is himself the supplier of the said supply, who is liable for compliances under section 52 including collection of TCS?

Clarification: In such a situation, TCS is to be collected by the Buyer-side ECO while making payment to the supplier for the particular supply being made through it.

Hope you find it interesting and useful to read.

For any clarification/ feedback, feel free to write us at amrg@amrg.in.

Best regards,

AMRG Team

About Us

AMRG & Associates is an established Chartered Accountants firm. It came into existence in 1984 and since then has grown its branches across major Indian cities such as Delhi, Mumbai and Chandigarh. Since its inception, it has become one of the leading chartered accountants’ firms in North India. AMRG & Associates offers its clients a wide range of exceptional services through the expertise of its highly motivated group of trained professionals. The firm provides expertise in financial and business advisory, tax and regulatory, audit and assurance and risk advisory services.

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© -2022 AMRG & Associates All Rights Reserved. This document has been written for the general interest of our clients and professional colleagues and is subject to change. This document is not to be construed as any form of solicitation. It is not intended to be exhaustive or a substitute for legal advice. We cannot assume legal liability for any errors or omissions. Specific advice must be sought before taking any action pursuant to this document.

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