Multiple ECOs explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Unbundled commerce broke a rule the law had assumed: that there is one platform per transaction. On an open network a buyer-side app, a seller-side app and the seller can all be different persons — and only one of them can be the collector.
Notification No. 37/2023-CT dated 04.08.2023 fixes the general rule: where more than one ECO is involved, "the electronic commerce operator" means the one who finally releases the payment to the supplier. Circular No. 194/06/2023-GST dated 17.07.2023 applies that to open networks in two limbs. Where the supplier-side ECO is not itself the supplier, the supplier-side ECO collects TCS and does the section 52 compliances, and the buyer-side ECO does neither. Where the supplier-side ECO is itself the supplier, the buyer-side ECO collects.
Why the question arose
The Handbook describes the shift: "In contemporary e-commerce, a single transaction for the supply of goods or services can involve multiple electronic commerce operators. For instance, one electronic commerce operator may provide the marketplace platform, another may handle payment processing, and a third might manage logistics."
Under the traditional model the position was simple — "a single ECO collects the payment, deducts TCS, and credits it to the supplier's ledger."
On an open network it is not. "in new models where multiple ECOs are involved — one serving the buyer and another serving the supplier — there has been confusion over which ECO should collect the TCS."
The chosen test is the money. Notification No. 37/2023-CT pins compliance on "the ECO who ultimately releases the payment to the supplier for that specific supply", and the Handbook explains why: it "pins the responsibility on the entity that controls the final disbursement of funds to the seller, ensuring a clear and undisputed line of compliance."
Limb one: the supplier-side ECO is not the supplier
The question: where multiple ECOs are involved in a single supply and the supplier-side ECO is not himself the supplier, who is liable for section 52 compliances including collection of TCS?
The clarification: compliance, including collection of TCS, "is to be done by the supplier-side ECO who finally releases the payment to the supplier for a particular supply made by the said supplier through him."
The circular's own worked example:
Buyer-side ECO collects payment from the buyer, deducts its fees or commissions and remits the balance to Seller-side ECO. Here, the Seller-side ECO will release the payment to the supplier after deduction of its fees or commissions and therefore will also be required to collect TCS, pay it to Government under section 52 and make the other section 52 compliances. In this case, the Buyer-side ECO will neither be required to collect TCS nor make other compliances in respect of that supply.
This is the standard ONDC shape, and the result is that the platform closest to the seller carries the obligation — which is also the platform that holds the seller's GSTIN and can compute the net value at GSTIN level.
Limb two: the supplier-side ECO is itself the supplier
The question: where the supplier-side ECO is himself the supplier of the goods or services, who is liable?
The clarification: "In such a situation, TCS is to be collected by the Buyer-side ECO while making payment to the supplier for the particular supply being made through it."
The circular's example: Buyer-side ECO collects payment from the buyer, deducts its fees and remits the balance to the supplier, who is itself an ECO within section 2(45). In that scenario the Buyer-side ECO collects TCS, pays it under section 52 and makes the other compliances.
Why the flip? Because the rule is that TCS is collected on supplies made through an operator by other suppliers. Where the supplier-side ECO is the supplier, it is not collecting on someone else's supply — it is making its own. The obligation therefore moves one step up the chain, to the operator through whom that supply reached the buyer.
The Handbook's summary is worth memorising:
"The responsibility to comply with TCS provisions rests with the ECO that releases the payment to the supplier. If the supplier-side ECO is not the actual supplier, it must collect TCS when making the final payment to the supplier. In such cases, the buyer-side ECO is not required to collect or remit TCS. Conversely, if the supplier-side ECO is also the supplier, the buyer-side ECO is responsible for collecting and remitting the TCS."
The circular closes by noting its purpose — to ensure uniform implementation and provide clear guidance for platforms like ONDC — and directs field units to issue trade notices.
The hotel booking chain
The Handbook applies the same rule to a familiar travel structure.
The question: Customer A books a hotel via ECOM operator-1, which is integrated with ECOM operator-2, which has the agreement with the hotelier. Operator-1 has no GST information about the hotelier. Who collects?
The answer: "Tax is to be collected at source by that e-commerce operator who is making payment to the supplier for the particular supply happening through it, which in this case will be ECOM Operator-2."
The illustration: Mr V books Hotel Sunshine through Cool Travel, which in turn books through Indian Holidays. When Mr V pays Cool Travel, Cool Travel deducts its commission and pays the rest to Indian Holidays. When Indian Holidays makes payment to Hotel Sunshine, Indian Holidays collects the TCS.
Note what the answer solves. Operator-1 could not have complied even if it wanted to — it does not hold the supplier's GSTIN. The rule allocates the duty to the only party with the information to discharge it.
A related allocation: the Tea Board
Circular No. 74/48/2018-GST dated 05.11.2018 applies the same reasoning to a very different platform, and is useful because it shows TCS being split across two different supplies in one settlement.
The Tea Board of India, as operator of the electronic auction system for trading tea including collection and settlement of payments, falls within the definition of an ECO liable to TCS. Buyers pay a consolidated amount into an escrow account maintained by the Board, covering the value of the tea, the selling and buying brokerages charged by the auctioneers, and the Board's own charges. The Board then pays the sellers (tea producers) for the tea and the auctioneers for their brokerage — "Under no circumstances, the payment is made by the Tea Board to the auctioneers on account of supply of goods i.e., tea sold at auction."
The clarification: TCS at the notified rate is collected by the Tea Board (i) from the sellers on the net value of supply of goods, i.e. tea; and (ii) from the auctioneers on the net value of supply of services, i.e. brokerage.
Two collections, two collectees, one settlement — allocated exactly as the payment flows.
Key takeaways
- Notification No. 37/2023-CT: where multiple ECOs are involved, the ECO is the one who finally releases payment to the supplier.
- Circular No. 194/06/2023-GST, limb one: supplier-side ECO not the supplier → supplier-side ECO collects; buyer-side ECO does nothing.
- Limb two: supplier-side ECO is the supplier → buyer-side ECO collects.
- The test allocates the duty to the party that holds the supplier relationship and the payment, which is also the party with the GSTIN data.
- In a hotel booking chain, the operator that pays the hotel collects — not the app the customer used.
- The Tea Board case shows TCS split between sellers on goods and auctioneers on brokerage out of one escrow settlement.
Read next
- Who Is an E-Commerce Operator? Sections 2(44) and 2(45), Read Properly
- Section 52 TCS: Rate, Net Value and When to Collect
- ECO Penalties: Section 122(1B), Interest and Late Fee
Disclaimer: Positions stated as on 5 September 2026, based on sections 2(45) and 52 of the CGST Act, 2017, Notification No. 37/2023-Central Tax dated 4 August 2023, and Circulars No. 194/06/2023-GST dated 17 July 2023 and 74/48/2018-GST dated 5 November 2018, as reproduced in the ICAI Handbook on E-Commerce Operators under GST (updated to 15 December 2025).