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CMA Final · Indirect Tax Laws and Practice · TDS and TCS under GST

In a month, a registered seller, Madhuri Textiles, made taxable supplies of Rs 14,00,000 through an e-commerce operator. In the same month, goods worth Rs 2,00,000 were returned by customers. Madhuri also made exempt supplies of Rs 3,00,000 through the same operator. Assuming all supplies are intra-state and the TCS rate is 0.5% in total (CGST and SGST together), what amount of TCS must the operator collect?

The operator must collect Rs 6,000. TCS under GST is levied at 0.5% on the net value of taxable supplies, which is taxable supplies minus returns. Here that is Rs 14,00,000 less Rs 2,00,000, or Rs 12,00,000. Exempt supplies are left out, so 0.5% gives Rs 6,000.

  1. ARs 6,000Correct
  2. BRs 7,000
  3. CRs 8,500
  4. DRs 12,000

Explanation

TCS applies to the net value of taxable supplies, i.e. taxable supplies less returns: 14,00,000 - 2,00,000 = Rs 12,00,000. Exempt supplies are excluded. At 0.5%, TCS = Rs 6,000. Rs 7,000 ignores returns, and Rs 12,000 uses 1% instead of 0.5%.

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