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TCS Liability under GST in case of multiple E-commerce Operators in one transaction (ONDC)

Updated: Jan 4



In the current platform-centric model of e-commerce (like Amazon and Flipkart) , the buyer interface and seller interface are operated by the same E-commerce aggregators (ECO) . This ECO collects the consideration from the buyer, deducts the TCS under Sec 52 ofthe 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. In this setup, buyer-side ECO could collect consideration, deduct their commission and pass on the consideration to the seller-side ECO. In this context, clarity has been sought as to which ECO should deduct TCS and make other compliances under section 52 of CGST Act in such situations, as in such models having multipleECOs in a single transaction, both the Buyer-side ECO and the Seller-side ECO qualify as ECOs as per Section2(45) of the CGST Act.


Vide Circular No. 194/06/2023-GST two issues are clarified by the GST Council :


Issue 1: In a situation where multipleECOs are involved in a single transaction of supplyof goods or servicesor both through ECO platformand where the supplier-side ECO himself is not the supplier in the said supply,whois liable for compliances under section 52 including collection of TCS?


In such a situation where multiple ECOs are involved in a single transaction of supplyof goods or services or both through ECO platformand where the supplier-side ECO himself is not the supplierof the said goods or services, the compliances under section52 of CGST Act, includingcollection 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.


e.g.: Buyer-side ECO collects payment from the buyer,deducts its fees/commissions and remits the balance to Seller-side ECO. Here, the Seller-side ECO will release the paymentto the supplier after deduction of his fees/commissions and therefore will also be required to collect TCS, as applicable and pay the same to the Government in accordance with section 52 of CGST Act and alsomake other compliances under section 52 of CGST Act.


In this case, the Buyer-side ECO will neither be required to collect TCS nor will be required to make other compliances in accordance with section 52 of CGST Act with respectto this particular supply.


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


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


e.g. Buyer-side ECO collects payment from the buyer, deductsits fees and remits the balance to the supplier (who is itself an ECO as per the definition in Sec 2(45) of the CGST Act). In this scenario, the Buyer-side ECO will also be requiredto collect TCS, as applicable, paythesame to the Government in accordance with section52 of CGST Act and also make other compliances under section 52 of CGST Act.

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