India e-commerce GST withholding tax

Mon 28th Nov 2016

Indian e-commerce companies will face Tax Collected at Source (TCS) obligations on the new Goods and Services Tax regime due to launch in 2017. The rate could hit 2% on intra-state sales of goods and electronic services.

TCS is an Indian income withholding tax collected from suppliers by Indian e-commerce companies – such as Snapdeal and Flipkart – selling certain goods acquired for resale. The e-commerce business then declares and pays any TCS collected in a quarterly return to the tax authorities. The vendor of the goods is entitled to a credit on any TCS suffered, which they  apply against other income tax return.

TCS is generally 1%, although a further 1% may be suffered on intra-state transfers according to the new GST legislation.

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