GST provisions on TDS, TCS to come into effect from Oct 1; Check details

It will now be mandatory for the notified entities to levy 1 per cent TDS on payments to good and service providers over a billing of more than 2.5 lakh rupees.

E-commerce companies such as Amazon, Snapedeal, Myntra, Paytm etc will now have to collect up tp 1 per cent TDS while making any payment to their suppliers. (Image: PTI)

The central government has recently asserted that it will implement the tax deducted at source (TDS) and tax collected at source (TCS) provisions under the good and services tax (GST) law from October 1 onwards. According to Central GST Act, it will now be mandatory for the notified entities to levy 1 per cent TDS on payments to good and service providers over a billing of more than 2.5 lakh rupees. Also, states are directed to collect extra 1 per cent TDS in adherence to state laws. This announcement indicates that all e-commerce companies such as Amazon, Snapedeal, Myntra, Paytm etc will now have to collect up tp 1 per cent TDS while making any payment to their suppliers under the GST. The said amount will be calculated on the net value of the goods or services supplied through the portal of the operator. E-commerce companies such as Flipkart, Myntra, Jabong, Amazon, Snapdeal and many others are now mandated to collect up to 1 percent TCS while making any payment to suppliers under the Goods and Services Tax (GST). Expressing his view on the abovementioned GST ammendment in e-commerce space, Abhishek Jain, Tax Partner at EY told PTI that e-commerce companies for TCS and various Government Companies for TDS would need to quickly gear up their ERP systems to comply with these provisions from 1st October. “With audit reports as well being notified, the industry would now really need to buckle up, given the short time frame,” Jain added further. As government wanted the new tax regime to settle down well, TDS/TCS provisions of GST laws were kept in abeyance for about an year. Experts believe that the decision taken by the revenue department will help government meets its monthly tax collection target of Rs 1 lakh crore. Experts also believe that bringing TDS and TCS collection provision under GST regime will further deepen the penetration of tax authorities in the Indian economy. The decision is likely to shape up widespread tax evasion of both direct and indirect taxes.