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

Meridian Infra Ltd, an e-commerce operator registered under GST, supplies a platform for third-party sellers. During a month, the net value of taxable supplies made through the platform by Suresh Garments (registered, Pune) is Rs 12,00,000, comprising supplies of Rs 14,00,000 less returns of Rs 2,00,000. All supplies are intra-State. What is the total TCS the operator must collect for the month, and in what form?

The operator collects Rs 6,000 in total. TCS is levied on the net value of taxable supplies after deducting returns, which is Rs 12,00,000, at 0.5% for an intra-State supply, split equally as Rs 3,000 CGST and Rs 3,000 SGST.

  1. ARs 12,000, being Rs 6,000 CGST and Rs 6,000 SGSTCorrect
  2. BRs 24,000, being Rs 12,000 CGST and Rs 12,000 SGST
  3. CRs 14,000, being Rs 7,000 CGST and Rs 7,000 SGST
  4. DRs 6,000, being Rs 3,000 CGST and Rs 3,000 SGST

Explanation

TCS under section 52 is collected on the net value of taxable supplies, i.e. aggregate supplies less returns: Rs 14,00,000 - Rs 2,00,000 = Rs 12,00,000. The rate is 0.5% in total (0.25% CGST + 0.25% SGST, rates effective from the 2024 reduction). Hence TCS = Rs 6,000 total, i.e. Rs 3,000 each. Option Rs 12,000 uses 1%, which is wrong.

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