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Taxation · Tax Deduction at Source and Collection of Tax at Source

Tax Collection at Source (TCS) by E-commerce Operators under GST

Updated 5 October 2026 · Fact-checked

TCS under Section 52 CGST Act means an e-commerce operator collects tax from the supplier's payment, at 0.5% of the net value of taxable supplies made through its platform in a month. Net value is taxable supplies minus returns. The operator deposits it, files GSTR-8 by the 10th, and the supplier gets credit.

Understand Tax Collection at Source (TCS) by E-commerce Operators

Many small sellers sell through online platforms. The department wants an early check on their turnover. Section 52 does this by making the e-commerce operator collect a small amount of tax when it pays the supplier. This is TCS (tax collected at source) under GST.

The duty applies to an operator who owns, operates or manages a digital or electronic platform and collects the consideration for supplies made by other suppliers through it. If the operator sells its own goods, that is its own supply and no TCS arises. Section 52 also applies only where the operator collects the payment. If the customer pays the supplier directly, there is no TCS. Under Section 24(x), an operator who must collect TCS needs compulsory registration, with no turnover threshold.

The base for TCS, the net value of taxable supplies, is the aggregate value of taxable supplies made through the operator by all registered persons in the month, less taxable supplies returned. Separately, Section 24(ix) requires persons who supply goods or services through an operator that must collect TCS to register. Supplies on which the operator itself pays tax under Section 9(5) are outside this clause. Exemption from this registration has been notified for certain small suppliers, for example intra-state suppliers of goods whose turnover is below the notified limit. Read the two clauses together: 24(x) is about the operator and 24(ix) is about the suppliers who sell through it.

The law lets the rate go up to 1%. The notified rate is now 0.5% (earlier 1%). For an intra-state supply it is 0.25% CGST + 0.25% SGST. For an inter-state supply it is 0.5% IGST. The base is the net value of taxable supplies, not the invoice total with GST.

The operator deposits the TCS within 10 days after the end of the month in which it was collected (Section 52(3)). It files GSTR-8 for each month (Section 52(4)). Both the deposit and GSTR-8 fall due on the same day, the 10th of the following month. The operator also files an annual statement by 31 December following the financial year (Section 52(5)).

The details of supplies and TCS furnished by the operator are made available to each supplier (Section 52(6)). On the basis of the operator's GSTR-8, the amount is credited to the supplier's electronic cash ledger (Section 52(7) and Rule 67). The supplier verifies, accepts or modifies the details shown to it, and any mismatch is dealt with through that process. The supplier uses the credit to pay tax liability or to claim a refund of the balance.

TCS is not an extra tax on the supplier. It is an advance payment, just like TDS under Section 51. TDS under Section 51 is 2% in total: 1% CGST + 1% SGST for intra-state supplies, or 2% IGST for inter-state supplies.

Key rules to remember

Net value of taxable supplies
Net value = Taxable supplies made through the operator by all registered persons in the month − Taxable supplies returned to suppliers in the month
Exclude exempt, nil-rated and non-taxable supplies. Exclude services on which the operator itself pays tax under Section 9(5). Use value without GST.
TCS amount
TCS = Net value × 0.5%
Intra-state: 0.25% CGST + 0.25% SGST. Inter-state: 0.5% IGST. Compute supplier by supplier, month by month.
Payment to supplier
Amount paid to supplier = Consideration collected from customers − TCS
The operator keeps the TCS and deposits it with the government.
Deposit of TCS
Within 10 days after the end of the month of collection, that is by the 10th of the following month
Section 52(3). This is the same date as GSTR-8.
Monthly return
GSTR-8 by the 10th of the following month
Section 52(4). Filed by every operator registered to collect TCS. It falls due on the same day as the deposit. File it even if there is no collection, as a nil return.
Annual statement
By 31 December following the financial year
Gives supplier-wise details of supplies and TCS for the year (Section 52(5)).
Supplier's credit
TCS credited to the supplier's electronic cash ledger
The operator's details are made available to the supplier under Section 52(6). The credit is given on the basis of the operator's GSTR-8 (Section 52(7) and Rule 67). The supplier verifies, accepts or modifies the details shown to it.

How to solve Tax Collection at Source (TCS) by E-commerce Operators questions

Use this order for any numerical or theory question on Section 52. It protects both the answer and the step marks.

  1. 1Check who is who. Identify the e-commerce operator and the suppliers. Confirm that the operator collects the consideration. If it does not, no TCS arises.
  2. 2Separate supplies. Drop supplies that are exempt, nil-rated or non-taxable. Drop services where the operator pays tax under Section 9(5). Drop the operator's own sales.
  3. 3Take the taxable value without GST. Work supplier-wise and separate intra-state from inter-state supplies.
  4. 4Deduct the taxable supplies returned during the month. Result: net value.
  5. 5Apply the rate. Intra-state: 0.25% CGST + 0.25% SGST. Inter-state: 0.5% IGST. Add the heads for the total TCS.
  6. 6If asked, find the amount paid to the supplier: consideration collected minus TCS.
  7. 7State the compliance: deposit and GSTR-8 both by the 10th of the following month, annual statement by 31 December, and credit to the supplier's cash ledger.

Quickest way: Four-line TCS check for MCQs and written answers

When to use it: Use it when a question gives a table of supplier sales with exempt supplies, returns and mixed intra-state and inter-state sales, and time is short.

  1. MCQ: cut every option that uses 1%, unless the question is clearly about the old rate. Then confirm the base is net taxable value, not the invoice total with GST.
  2. Write three columns: taxable value, returns, net value. Strike out exempt and Section 9(5) lines first.
  3. Multiply net value by 0.5%. For intra-state, split into 0.25% CGST and 0.25% SGST. Do not double the rate.
  4. Written answer format: (1) provision and rate, (2) working note with net value, (3) TCS by head, (4) one line on GSTR-8 and cash ledger credit. Each part carries step marks.

Common mistakes in Tax Collection at Source (TCS) by E-commerce Operators

  • Applying 1% instead of 0.5%

    Older books and notes still show 1% (0.5% CGST + 0.5% SGST).

    Fix: Use 0.5% in total. Intra-state is 0.25% + 0.25%. Inter-state is 0.5% IGST. Use 1% only if the question refers to the earlier period.

  • Taking invoice value including GST as the base

    Students read the amount the customer paid.

    Fix: Take the taxable value excluding GST. Net value is based on taxable supplies, and GST is not part of the value of supply.

  • Including exempt, nil-rated or Section 9(5) supplies

    Students treat every sale through the platform as one pool.

    Fix: Section 52 applies only to taxable supplies. Services where the operator pays tax under Section 9(5) are also excluded.

  • Forgetting to deduct returns

    The word 'net' is missed.

    Fix: Subtract taxable supplies returned to suppliers during the month. This is the net value.

  • Confusing TCS under GST with TCS under the Income-tax Act and with TDS under Section 51

    The names look alike.

    Fix: Under GST, Section 52 TCS is collected by an e-commerce operator at 0.5% and reported in GSTR-8. Section 51 TDS is deducted by notified deductors at 2% in total (1% CGST + 1% SGST, or 2% IGST) and reported in GSTR-7. Do not bring Income-tax Act rates into a GST answer.

  • Charging TCS when the operator does not collect the payment, or on the operator's own sales

    Students apply the rule to every platform sale.

    Fix: Check two points first. The supply must be by another supplier through the platform. The operator must collect the consideration.

Worked examples

Example 1

In a month, an e-commerce operator collects payment for supplies made through its platform: Supplier A, a registered person making intra-state taxable supplies of ₹6,00,000, of which goods worth ₹50,000 were returned; Supplier B, a registered person making inter-state taxable supplies of ₹4,00,000, no returns; Supplier C, exempt supplies ₹2,00,000; Supplier D, services of ₹3,00,000 on which the operator itself is liable to pay tax under Section 9(5). All values exclude GST. Compute the TCS under Section 52 at 0.5%.

Show the solution
  1. Supplier C: exempt supplies are not taxable supplies, so they are excluded.
  2. Supplier D: services under Section 9(5) are excluded because the operator pays the tax itself.
  3. Supplier A: net value = ₹6,00,000 − ₹50,000 = ₹5,50,000. It is intra-state, so CGST at 0.25% = ₹1,375 and SGST at 0.25% = ₹1,375. Total TCS = ₹2,750.
  4. Supplier B: net value = ₹4,00,000. It is inter-state, so IGST at 0.5% = ₹2,000.
  5. Total TCS = ₹2,750 + ₹2,000 = ₹4,750. Of this, CGST is ₹1,375, SGST is ₹1,375 and IGST is ₹2,000.

Answer: Total TCS = ₹4,750 (CGST ₹1,375, SGST ₹1,375, IGST ₹2,000). Net values: A ₹5,50,000 and B ₹4,00,000. C and D are excluded.

Example 2

A registered supplier sells goods through an e-commerce operator, within the same State. Taxable value for the month is ₹1,00,000 with no returns. GST is 18%. The operator collects the whole consideration from customers. (a) How much does the operator pay to the supplier? (b) By which dates must the operator deposit the TCS and file GSTR-8 for September 2026? (c) What happens to the TCS in the supplier's hands?

Show the solution
  1. Consideration collected = ₹1,00,000 + 18% GST of ₹18,000 = ₹1,18,000.
  2. TCS = 0.5% of net value ₹1,00,000 = ₹500. This is ₹250 CGST and ₹250 SGST.
  3. (a) Payment to supplier = ₹1,18,000 − ₹500 = ₹1,17,500.
  4. (b) TCS collected in September 2026 must be deposited within 10 days after the end of September, that is by 10 October 2026. GSTR-8 for September 2026 is also due on 10 October 2026.
  5. (c) The ₹500 is shown to the supplier through the operator's GSTR-8. On the basis of that GSTR-8, it is credited to the supplier's electronic cash ledger (₹250 under CGST and ₹250 under SGST). The supplier verifies, accepts or modifies the details shown to it. The supplier uses the credit to pay its output tax liability or claim a refund of the balance.

Answer: (a) ₹1,17,500. (b) Deposit and GSTR-8 by 10 October 2026. (c) The ₹500 is credited to the registered supplier's electronic cash ledger on the basis of the operator's GSTR-8, and the supplier verifies, accepts or modifies the details. The credit is available for paying tax.

Exam tips

  • Write the rate as 0.5% in total, with the split (0.25% + 0.25% or 0.5% IGST). The examiner usually gives marks for the split.
  • Always show a working note for net value. Mark each exclusion (exempt, Section 9(5), returns) as a separate line.
  • In theory answers, use the provision-facts-conclusion pattern: Section 52, the facts (who collects, who supplies), then the TCS result and compliance.
  • For the difference between TDS and TCS, give 4 points: who acts, the section, the rate, and the return (GSTR-7 or GSTR-8). Do not mix them up.
  • MCQs on this topic test the rate, the due date (10th) and the credit to the cash ledger. Be sure of these three facts.

Practice questions from Tax Deduction at Source and Collection of Tax at Source

Tax Collection at Source (TCS) by E-commerce Operators in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Tax Collection at Source (TCS) by E-commerce Operators: frequently asked questions

What is the TCS rate under GST for an e-commerce operator?

The notified rate is 0.5% of the net value of taxable supplies. This is 0.25% CGST plus 0.25% SGST for intra-state supplies and 0.5% IGST for inter-state supplies. It was earlier 1%, and the Act allows a rate of up to 1%.

How do I calculate the net value of taxable supplies for TCS?

Add up the taxable supplies made through the operator by all registered persons in the month. Leave out exempt supplies and Section 9(5) services. Subtract taxable supplies returned during the month. Do this supplier by supplier.

What is the due date for GSTR-8?

GSTR-8 is due by the 10th of the month after the month of collection (Section 52(4)). The TCS deposit under Section 52(3) falls due on the same day, as it must be paid within 10 days after the end of that month. The annual statement is due by 31 December after the financial year.

What is the difference between TDS and TCS under GST?

TDS under Section 51 is deducted by notified persons such as government departments when they pay a supplier, at 2% in total (1% CGST + 1% SGST, or 2% IGST). TCS under Section 52 is collected by an e-commerce operator when it pays a supplier for platform sales, at 0.5%. TDS is reported in GSTR-7 and TCS in GSTR-8, and in both cases the supplier gets credit in the cash ledger.