New TCS Norms Mandate State Wise GST Registration for E-Commerce Companies


October 21, 2019

State-Wise GST Registration for E-Commerce Companies

The new TCS (Tax Collected at Source) provisions set to come into motion from October 1st will bring significant changes as far as accounting operations of e-commerce companies in India are concerned. These changes are set to affect foreign and homebred e-commerce companies alike. The new provisions mandate e-commerce companies to register under GST in all states and collect TCS from October 1.

The multiple state registrations norms are set to increase compliance burden on companies and a collective voice was also raised against the same. But the government seems apprehensive and unwilling to permit single registrations only. Even foreign e-commerce companies will have to comply for individual state registrations.

On the hindsight, experts say that the new provision would increase tax compliance by manifolds and check tax evasion. Some experts do believe that a centralized registration provision for foreign e-commerce companies would be ideal.

Also Read: GST Refund Claim Process Make Easier by Govt for Businesses

  • Intrastate supplies with the value greater than 2.5 Lakh will attract 1% state GST and 1% central GST as TDS
  • Interstate supplies will attract 2% integrated GST as TDS
  • For foreign e-commerce players, any seller on the platform who is based outside India will not be liable for TCS

TDS will ensure that transaction and exchange are traceable till source. For now, e-commerce companies need to deduct only 1% TDS from supplier pay slips for goods sold on their platform. The applicable TDS rates on intrastate supplies will be 0.5% each for central and state GST.


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