• Notification Date: 13-07-2023
• Notification No: N/A

GST Council to Clarify TCS Liability of Ecommerce Suppliers On ONDC

The Goods and Services Tax (GST) Council is expected to give the clarification on the TCS liability of suppliers engaged in ecommerce trading through Open Network Digital Commerce (ONDC), according to a media report on Sunday. 

The Council said that the explanation will be given on 11 July and would include cases where multiple operators are involved in a transaction. 

The reports mentioned that ONDC is a new initiative of the department to promote industry and internal trade (DPIIT). It said so far, there is no clarification who is liable for TCS compliance under the GST laws. 

Under the GST law, every ecommerce operator is supposed to collect TCS at the rate of 1 per cent of the taxable value of goods or services sold through its platform. 

Furthermore, report suggest that the Law Committee that includes the Centre and the state tax officers, has recommended the Council that in a situation where multiple ecommerce operators (ECOs) are involved in a single transaction through ECO platform their TCS compliances will be done from the supplier’s end, who finally releases the payment to the supplier. 

ONDC's open network operates in two models namely the marketplace model and the inventory model. 

Under the inventory model, TCS is deducted by the ecommerce platform while making payment to the seller. While the TCS deduction in the case of marketplace model is subject to confusion where two intermediaries are involved in a single transaction. 

Meanwhile since several entities are involved in the process, the Department for Promotion of Industry and Internal Trade (DPIIT) has sought clarity to determine whether the buyer of the ecommerce operator or the seller of the electronic trade company would include deduction of the Tax Collected at Source (TCS). 

As per report the TCS would be liable to be deducted by the seller application while making payment to the supplier. A clarification of which is likely to to be issued by the GST Council on Tuesday.