Circular No.: 194/06/2023-GST
Date of Circular: 17th July 2023
Relevant Sections and Rules:
- CGST Act, 2017:
- Section 52: Tax Collection at Source (TCS) by E-Commerce Operators
- Section 2(45): Definition of “E-commerce Operator”
- Section 168(1): Power to issue instructions
Summary of Clarifications Provided:
- TCS Liability in Multi-ECO Transactions Where Supplier-side ECO Is Not the Supplier:
In scenarios (such as in ONDC models) where multiple e-commerce operators (ECOs) are involved in a transaction—one acting on the buyer-side and another on the supplier-side, and the supplier-side ECO is not the supplier of goods/services—the supplier-side ECO who ultimately releases payment to the supplier is liable to comply with Section 52, including:
- Collection of TCS,
- Payment of TCS to the Government, and
- Other reporting obligations under Section 52.
In such cases, the buyer-side ECO is not required to collect TCS or comply with Section 52 in relation to that transaction.
- TCS Liability When Supplier-side ECO Is Also the Supplier:
If the supplier-side ECO is also the supplier of the goods or services in the transaction, then the buyer-side ECO, who collects payment from the buyer and remits it to the supplier, must:
- Deduct TCS as applicable,
- Pay the TCS to the Government, and
- Comply with other obligations under Section 52.
In this case, the ECO acting as supplier does not handle TCS compliance, and responsibility lies solely with the buyer-side ECO.
These clarifications ensure uniformity in TCS compliance under the GST regime, especially in digital commerce ecosystems involving multiple platform operators.
Source: Circular No.: 194/06/2023-GST
