E commerce operator-GST and TDS implications

Hi all,

a company is requiring to register under GST. it is an e-commerce operator for activities not covered under section 9(5). Thus it is requiring to collect TCS @ 1% on the sale value of the seller. e commerce operator charges a service charge on the sale value on which GST is charged. [ Total value-899 {Sale value of seller 800, service charge of ecommerce operator 99, GST on service charge 17.82(18% of 99), TCS on the transaction 8 (1% of 800)}]. Does the e commerce operator need to obtain 2 registration under regular scheme as well as tax collector(e-commerce). Kindly suggest on how to move forward with the registration. Also is there any other tax implications that i should be aware of? for example 194O.. does i need to deduct TDS under income tax as well as TCS under GST? Does all the sellers on the platform of the e-commerce needs to be registered under GST?

Hey! Here’s a detailed response on the GST and TDS/TCS implications for an e-commerce operator:

1. GST Registration:

Single registration:
Generally, the e-commerce operator needs only one GST registration in the state from where they operate.
They do not need separate registrations for regular supply and TCS collection under GST.
The TCS collection (1%) on sale value under Section 52 of the CGST Act is part of GST compliance and handled through the same registration.

2. GST on Service Charges:

The service charge (e.g., Rs. 99 in your example) charged by the e-commerce operator to the seller is a supply of service by the operator to the seller and attracts GST @ 18% (Rs. 17.82 in your case).

3. TCS (Tax Collected at Source) under GST (Section 52):

The e-commerce operator is required to collect TCS @ 1% on the net value of taxable supplies made through its platform by the sellers (e.g., Rs. 8 on Rs. 800 sale value).
This TCS must be deposited with the government and reported in GSTR-8 returns.

4. Income Tax Deduction at Source (TDS) vs GST TCS:

Section 194-O (Income Tax):
This mandates e-commerce operators to deduct TDS @ 1% on the gross amount of sales or services made through their platform to the sellers (applicable if turnover crosses threshold).
This is separate from GST TCS and applies under income tax law.
Key point:
The operator must comply with both:
- GST TCS @ 1% on sale value (under GST Act)
- TDS @ 1% under Income Tax Act (Section 194-O) (if applicable)
Both are independent and must be complied with.

5. GST Registration for Sellers on Platform:

Are all sellers required to register under GST?
Not necessarily.
- Sellers must register under GST if their turnover exceeds threshold limits or if other conditions apply.
- If sellers are below threshold and make supplies through the e-commerce platform, GST registration may still be required if they supply inter-state or if other mandatory conditions apply.
- The operator’s TCS liability does not automatically trigger GST registration for sellers.

Summary:

Requirement	Applicable / Details
GST Registration for e-commerce operator	Single registration suffices
GST on service charge	Yes, @ 18% GST on operator’s service charge
GST TCS on seller’s sale value	Yes, 1% TCS under Section 52
Income tax TDS under Section 194-O	Yes, 1% TDS on gross amount (if threshold met)
Seller’s GST registration	As per applicable turnover/conditions