Marketplaces will collect 1% on IGST or 0.5% on CGST plus 0.5% SGST as TCS depending on whether the transaction is Inter-state or Intra-state. And, they should file GSTR-8 in all states from which they have registered sellers & deposit the TCS collected under each merchant's GSTIN Number. Once they file GSTR-8, it will be displayed in GSTR-2A of Sellers GSTIN login under Part-C > TCS Credits section for each month. Marketplaces would be reporting Gross Sales & Returns, NET Taxable Value liable to collect TCS along with the TCS collected against IGST, CGST & SGST every month.
The NET Taxable value would be calculated as the Total of Taxable value for the sale happened during the current month minus the Total of Taxable value for the returns received during the month. Returns received in a particulate month can be for the sale that happened during the same month itself or for a sale that happened during one of the previous months.
Which means, the NET Taxable Sales value reported by Marketplaces under GSTR-8 would always be lesser than the NET Sales figures posted by us when we file GSTR-1, at least for the month of Oct 2018 and for a couple of months thereafter. This is because we adjust the NET value of the Returns we received for a Sale prior to TCS against the Sales Value in the current month after TCS.
How to validate the NET Sales figures from Sales Reports with the value reported by Marketplaces in TCS Return?
When we consolidate the NET Sales for a specific month, we would always consider NET sales happened during the current month & the NET returns received in the current month. This means, we can very well receive a return for a sale that happened prior to 01 Oct 2018 as well.
Let's define the details as below.
(1) NET Taxable Value of Sales for the Current Month
(2) NET Taxable Value of Returns received for orders after 01 Oct 2018
(3) NET Taxable Value of Returns received for orders before 01 Oct 2018
NET of Turnover as per GSTR-1 = (1) (2) (3)
NET of Turnover posted by Marketplaces = (1) - (2)
This means that we will always see an inflated Taxable value for Sales posted in TCS Returns by marketplaces, at least for the initial few months until (3) becomes Zero.
NO additional registration requirements for the Individual eCommerce Merchants with regards to TCS. But, marketplaces must register for E-Commerce Operator GSTIN registration in all states where they have Registered Sellers selling on the platform. This means that the marketplaces must register in all 36 States & Union Territories of India to obtain an E-Commerce Operator GSTIN number for filing TCS.
Of course, all eCommerce Sellers MUST obtain GST Registration to sell through the e-Commerce marketplace irrespective of the turnover. The generic exemption of Rs. 20L turnover does not apply to e-Commerce Sellers, unfortunately.
When, Where & How we can find out the Data filed by Marketplaces in GSTR-8 Return?
Marketplaces should file GSTR-8 on or before the 10th of the next month. Once the return is filed by the Marketplaces, it will start appearing in GSTR-2A > Part-C > TCS Credits Section like the one shown below.
Once Marketplaces file GSTR-8 Return, it will come under TDS & TCS Credits Received section of Return Dashboard. To view and act on it, you should navigate to Return Dashboard > Search for the Current Month > TDS & TCS Credits Received > Prepare Online > TDS Credits Received section to view it & act on it.
You will have 2 actions available here. You can either Accept or Reject the filing by the marketplaces (These options were grayed out until now & it is not open for our action). Things are not clear on what happens when you reject the numbers filed by e-Commerce marketplaces (please expect an update on this later). If all data filed by marketplaces are fine and acceptable to us, you can select them & Click on Accept to mark your agreement. Once you Accept/Reject the filings and generate the Summary for filing, the TDS & TCS Credits Receivedâ€� section will look like this.
Once you have at least one entry in Accepted/Rejected status, you will be able to generate the Summary file for Filing & the option to FILE TDS TCS CREDITS RECEIVED button will get enabled. As per the theory, we should see it in Electronic Cash Ledger once Marketplaces files GSTR-8 which does not seem to be True. It looks like we need to file TDS & TCS Credits Received Return to reflect the TCS Amount in Electronic Cash Ledger. And, the same should ideally flow to Section 6.2 TDS/TCS Credit Received of GSTR-3B for us to claim it.
I will update the article with the complete details once I could complete the GST Return filing Workflow (practically) for the month of Oct 2018. Unfortunately, this is the first time weâ€™re doing this and we can only follow the Trial & Error method of doing things considering the delay/lack of timely response from GST Authorities & Marketplaces.
Changes in GSTR-1 Filing Process after TCS
Unfortunately, GST Return Filing workflow is not yet equipped with an option to report the sales under E-Commerce (EC) using E-Commerce operator GSTIN of each marketplace.
As per the theory, we should report sales marketplace-wise as well to match it with the TCS Reporting by marketplaces under GSTR-8. Which means, we may have to wait to see another tab to appear for E-Commerce to enter sales figures via Prepare Online mode for GSTR-1.