All e-commerce firms including Flipkart and Amazon have got November 10 deadline to deposit tax deducted at source on all payments made to their sellers. However, with complexities in the government norms, these e-tailers have been facing difficulties in TCS registration.
So far, several marketplaces are yet to register for TCS as many states are asking them to establish a physical presence in their jurisdiction. However, this is not in line with guidelines given by the central government which emphasised that e-commerce marketplaces don’t require a physical office in the states.
For the uninitiated, TCS an anti-tax avoidance measure comprising 1 per cent CGST and SGST has to be collected and paid by 10th every month. Earlier, the GST Council had postponed implementation of TCS/TDS for a year from July 1, 2017, till June 30, 2018.
The implementation date was further extended and finally came into effect from October 1. If e-commerce marketplaces fail to deposit the tax before November 10, they will have to pay penalty.
States including Kerala, Andhra Pradesh, Punjab, Gujarat, Chhattisgarh, Uttarakhand, Bihar, Rajasthan, and Assam have been facing problem during registration.
Experts believe that lack of coordination and understanding between the central government and states have brought utter confusion regarding TCS. They anticipate that the deadline is likely to be extended.
In case, the deadline remains the same, the sellers will end up paying the entire tax liabilities on supplies made through e-commerce marketplaces.
Meanwhile, a Finance Ministry official said the registration process still can be done easily. “In the address line, just mention the address with pin code and then go for jurisdictional State and pin code. Choose a State and mention any pin code of the State, the registration process will be completed,” he explained.