TCS (Tax Collected at Source)

Tax Collected at Source (TCS) is the tax collected by a seller from the buyer at the time of sale. Unlike TDS (where the payer deducts tax), in TCS, the seller adds the tax to the sale price and collects it from the buyer.

Common TCS scenarios:

• Sale of goods above Rs. 50 lakhs: 0.1% TCS under Section 206C(1H)
• E-commerce operator: 1% TCS under Section 52 of CGST Act on net taxable supplies
• Foreign remittances: 5-20% TCS under Section 206C(1G) on LRS transactions
• Sale of motor vehicles above Rs. 10 lakhs: 1% TCS
• Sale of scrap, timber, minerals: Various rates under Section 206C

E-commerce TCS under GST: E-commerce operators like Amazon and Flipkart collect 1% TCS (0.5% CGST + 0.5% SGST) on the net value of taxable supplies made through their platform. This TCS is reflected in the seller's GSTR-2A and can be claimed as credit.

For businesses selling on marketplaces, reconciling TCS collected by platforms with the actual sales and settlements is a critical monthly task.