In the booming world of B2B e-commerce, platforms act as the backbone for thousands of suppliers, helping them reach buyers across the country. But while tech, logistics, and marketing take center stage, there's a silent but critical player behind the scenes: Tax Compliance.
Among all tax obligations, TCS (Tax Collected at Source) under GST often leaves e-commerce aggregators scratching their heads. Don’t worry — this guide is your one-stop resource to understand, manage, and file TCS returns effectively.
Under Section 52 of the CGST Act, every e-commerce operator (i.e., marketplace/platform) is required to collect tax at source (TCS) at 1% (0.5% CGST + 0.5% SGST or 1% IGST) on the net taxable value of sales made through the platform by other suppliers.
Who Collects TCS?
The e-commerce operator (not the seller)
When is it collected?
At the time of payment to the seller
On what value?
The net value of taxable supplies, i.e., total sales minus returns
Let’s say a seller sells goods worth ₹1,00,000 through your platform. If ₹10,000 worth of goods are returned, the net taxable value is ₹90,000. You collect 1% TCS = ₹900 and deposit it to the government.
If you are:
An e-commerce aggregator/operator
Facilitating supply on behalf of other suppliers
Registered under GST as an e-commerce operator
Then you must collect and file TCS through Form GSTR-8 every month.
Let’s walk through the TCS filing process like a pro:
To start collecting TCS, you must:
Register separately under GST as an e-commerce operator
Register in each state where you have suppliers, even without a physical presence
Use the GST ECO registration process on the GST portal
📝 Without registration, you can’t collect or deposit TCS legally.
You must:
Track each taxable transaction made through your platform
Calculate TCS on net taxable value (Sales – Returns)
Ensure data is maintained seller-wise and state-wise
📌 Accurate transaction logs are crucial for matching and reconciliation.
Collected TCS must be:
Deposited by the 10th of the following month
Paid via Form GST PMT-06 (payment challan)
Clearly categorized under CGST, SGST, or IGST
💡 Late deposit leads to interest and penalties under Section 52.
This is your monthly return for reporting TCS.
GSTIN of every seller
Total taxable supplies made
Returns (if any)
Net amount on which TCS is collected
Actual TCS amount collected (CGST/SGST/IGST)
10th of every month
✅ Form GSTR-8 also auto-populates into sellers’ GSTR-2A, helping them claim TCS credit.
Once you file GSTR-8:
Your sellers can view the TCS credit in their electronic cash ledger
They can use this credit to offset their output tax liability
⏱ Timely and accurate filing = happy sellers!
Even one small error in TCS filing can disrupt the seller’s GST credit and raise compliance red flags.
Avoid these pitfalls:
❌ Not collecting TCS on time
❌ Incorrect GSTINs or mismatched invoice details
❌ Forgetting to consider returns
❌ Delays in depositing TCS or filing GSTR-8
❌ Not reconciling seller-wise and transaction-wise data
What if you make a mistake?
You can correct any error in GSTR-8 in the return of the following month.
📆 But corrections are allowed only up to:
30th September following the end of the financial year, or
The date of annual return filing — whichever is earlier
So, keep a tight check on all entries monthly!
Handling thousands of transactions manually? Risky and exhausting.
Try automation tools that:
Auto-calculate TCS for every seller
Generate GSTR-8 with 100% accuracy
Match invoices & returns in real-time
Send payment reminders and alerts
🎯 Result? Zero stress, better accuracy, and full compliance.
TCS filing may not seem glamorous, but it’s a non-negotiable part of operating a compliant and trusted B2B e-commerce platform.
Here’s your quick checklist:
✅ Register under GST
✅ Track seller transactions
✅ Collect TCS on net taxable value
✅ Deposit TCS by 10th of next month
✅ File GSTR-8 correctly and on time