Travel agents offering other services including online ticketing will be legally accountable to subtract 1% tax at source below the Goods and Services Tax rule. This decision was made since they have been categorized as e-commerce workers, the CBEC (Central Board of Excise and Customs) claimed to the media this week.
Under the GST rule, an e-commerce company is needed to amass 1% of the total value of chargeable supplies made via it. The sum so composed money is referred as TCS or Tax Composed at Source. But this facility has been kept in state of suspension for the time being. Online travel agents have been categorized as ECO (e-commerce operators) and hence they have to take away TCS, the CBEC further claimed at the conference.
The CBEC, in a new set of FAQs (frequently asked questions), claimed that the TCS obligation might not be relevant to someone trading own goods via a website. Only appropriate GST for the products might be taxed in that scenario. E-commerce or electronic commerce refers to supply of services or goods, comprising digital goods, over electronic system. And an e-commerce operator is an individual who operates, owns, or manages the e-commerce for electronic platform, it claimed.
“Online travel agents offering facilities via electronic or digital platform will fall below the segment of ECO below Section 52 of the CGST (Central GST) Act, 2017 legally responsible to take away TCS,” the CBEC said. CBEC also verified that the advantage of threshold exception is not accessible to a supplier or an e-commerce operator on the e-commerce platform. Businesses with revenue up to Rs 20 Lakh are otherwise excused from GST. As per the CGST Act, e-commerce firms have to take away 1% TCS while making transaction to vendors below the GST rule.
The CBEC claimed that each e-commerce operator is legally responsible to amass taxes on behalf of vendor. Apart from this, the tax sum composed by the operator will have to be remunerated to the government in 10 Days after the end of the month in which the money was composed.