Key Changes in TCS for E-Commerce: Notification No. 15/2024-Central Tax

Simplified Explanation of Notification No. 15/2024-Central Tax

**1. Notification Overview:

This notification updates the earlier notification (No. 52/2018-Central Tax) regarding the tax collection at source (TCS) by electronic commerce operators.

**2. Key Amendment:

**A. Reduction in TCS Rate:

• Previous Rate: The earlier notification required electronic commerce operators to collect 0.5% of the net value of intra-state taxable supplies made through their platforms where they collect the consideration for these supplies.
• New Rate: The updated notification reduces this rate to 0.25%.

**B. Effective Date:

• This change takes effect from the date the notification is published in the official gazette, which is July 10, 2024.

**3. Explanation with Example:

• What It Means:
  • Electronic commerce operators, such as online marketplaces, are responsible for collecting tax on behalf of sellers when they process payments for transactions.
  • The percentage of tax they need to collect from sellers has been reduced from 0.5% to 0.25% of the net value of intra-state taxable supplies.
• Example:
  • Scenario: Suppose an online platform facilitates the sale of goods worth ₹100,000 within the same state. The platform collects the payment from the buyer.
  • Previous TCS: With a 0.5% rate, the tax collected by the operator would be ₹500.
  • New TCS: With the reduced 0.25% rate, the tax collected by the operator will be ₹250.

**4. Summary:

• The tax collection rate by electronic commerce operators for intra-state taxable supplies has been halved from 0.5% to 0.25%.
• This change is effective from July 10, 2024.