The country’s top three e-commerce firms – Amazon, Flipkart and Snapdeal came together for the first time to voice concern over a Tax Collection at Source, or TCS, clause for online market places under the draft GST law. The move, they cautioned, could lead to capital for sellers getting blocked and result in almost two lakh people losing their jobs.
The proposed clause, which mandates that e-commerce marketplaces deduct a portion of the amount payable to the supplier of goods or services and remit it to the government, would risk locking up about ₹400 cr. of capital per annum for small sellers, the firms pointed out.
What is TCS?
Tax Collected at Source (TCS) is income tax collected by seller in India from payer on sale of certain items. It is provided in section 206C of Income Tax Act 1961. The seller has to collect tax at specified rates from the payer who has purchased the items.