Section 52 TCS: Rate, Net Value and When to Collect

Section 52 TCS 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.

Three details carry almost all the risk in TCS: the rate changed in July 2024, the base is net value per supplier GSTIN, not per transaction, and collection is triggered by the supply, not the payment. Get any of the three wrong and every month's GSTR-8 is wrong.

Section 52(1) requires every ECO, not being an agent, to collect an amount at a rate not exceeding 1% of the net value of taxable supplies made through it by other suppliers where the consideration is to be collected by the operator. TCS came into force on 01.10.2018. The rate was 0.5% CGST + 0.5% SGST/UTGST, and 1% IGST, until 09.07.2024; from 10.07.2024 it is 0.25% + 0.25% intra-State (Notification No. 15/2024-CT) and 0.5% inter-State (Notification No. 1/2024-Integrated Tax). Net value is computed at the supplier's GSTIN level, excludes 9(5) services, and nets off returns.

Who collects, and when

Who: every electronic commerce operator, not being an agent, where the supplier makes supplies through it and the consideration is collected by the operator. The Handbook draws the conjoint conclusion: TCS applies "only when a person allows other suppliers to supply goods or services or both through a digital or electronic platform which is owned, operated or managed by it and also collects the consideration for the supply on behalf of the other supplier and then remits the consideration to him."

When: "Tax is to be collected at source once supply has been made through the e-commerce operator irrespective of the actual collection of consideration from the customer / receiver or others."

The Handbook's example makes it concrete: if the supply took place through the ECO on 30 January 2024 but the consideration was collected in March 2024, TCS "has to be collected and reported in the statement for the month of January, 2024."

Two situations produce no TCS:

• Order cancelled before the supply — no supply, no TCS.
• Advance received before supply — no TCS, since supply is not yet effected.
• Returns are already outside, because collection is on a net basis.

The five exclusions

The Handbook lists when tax shall not be collected at source:

1. When the consideration is not routed through the ECO.
2. In respect of exempted supplies made through it.
3. For categories of services notified under section 9(5).
4. In respect of activities or transactions listed in Schedule III.
5. In respect of non-GST supply.

Two further exclusions appear in the FAQs, and both follow from the same principle:

• No TCS on supplies where the recipient pays under reverse charge.
• No TCS on import of goods or services — because those are reverse charge supplies.

The rate, before and after 10 July 2024

The originals were Notification No. 52/2018-Central Tax and Notification No. 02/2018-Integrated Tax, both dated 20.09.2018, with corresponding State and UT notifications. The reduction came through Notification No. 15/2024-Central Tax dated 10.07.2024 and Notification No. 1/2024-Integrated Tax dated 10.07.2024.

TCS came into force on 01.10.2018 by Notification No. 51/2018-Central Tax dated 13.09.2018, after the provisions of sections 51 and 52 had been kept suspended — a CBIC press release of 29.06.2018 extended that suspension to 30.09.2018.

And there is no lower rate available. The Handbook answers the question directly: "TCS shall be at a rate not exceeding 1% as may be notified. As of now the rate notified is 0.25% (each for CGST & SGST) and 0.5% for IGST without any exception. There seems to be no provision in the Act or Rules which empowers a lower rate of TCS."

There is also no threshold. "TCS has to be collected from ₹1. There is no threshold limit."

Net value of taxable supplies

The Explanation to section 52(1):

"net value of taxable supplies" shall mean the aggregate value of taxable supplies of goods or services or both, other than services notified under sub-section (5) of section 9, made during any month by all registered persons through the operator reduced by the aggregate value of taxable supplies returned to the suppliers during the said month.

The computation is at GSTIN level, not gross. The Handbook answers this expressly: "The value of net taxable supplies is to be calculated at GSTIN level of the supplier who has supplied goods or services or both through the electronic commerce operator."

So each supplier is netted separately. If "A" and "B" both supply through the platform, net value is computed for A and for B independently. Returns of A cannot reduce the supplies of B.

Negative values are ignored, and do not carry forward. "if the value of returned supplies is more than supplies made on behalf of any of such supplier during any tax period, the same would be ignored in his case for that particular tax period." And: "Negative amount cannot be declared. There will be no impact in the next tax period also… the same would be ignored in current as well as future tax period(s)."

That is a real, if small, permanent loss to a supplier with heavy returns in a month, and it should be reconciled rather than assumed to reverse itself later.

Valuation: what comes out of the base

GST itself comes out. "the value of supply shall exclude the taxes leviable under the GST namely CGST, SGST, UTGST, IGST and Cess." Tax is collectible only on the taxable value of the taxable supplies, net of returns.

Exempt goods come out even if billed together. "no tax shall be collected on the value of exempted goods or services or both even if the exempt and taxable supplies are shown together in a tax invoice unless they are mixed or composite supplies."

The Handbook's example: M/s Balaji and Co. supplies taxable goods of ₹1,25,000 and exempt goods of ₹1,40,000 through the platform, on one invoice of ₹2,65,000 plus GST. TCS is collectible on ₹1,25,000 only.

Income-tax TCS comes out too. Section 15(2) includes taxes and charges levied under any other law in the value of supply where charged separately. But per Circular No. 76/50/2018-GST dated 31.12.2018 and its corrigendum F. No. 20/16/04/2018-GST dated 07.03.2019, TCS under the Income-tax Act, 1961 is not includible, being "an interim levy and not having the character of tax". So GST TCS is not collected on the income-tax TCS amount.

Convenience charges may be in. "Convenience/other charges charged by the suppliers may fall within the TCS ambit in as much payment is passed through ECO to the supplier."

And where the ECO never sees the invoice, TCS is still due on the net taxable value of the supplies for which the ECO collects consideration — remitted "on the basis of the consideration collected by the electronic commerce operator after deducting the CGST, SGST or UTGST or IGST thereon."

The supplier's liability is independent of the collection

A point worth stating because it is sometimes argued the other way. Asked whether a failure by the ECO to collect and remit affects the supplier's liability, the Handbook answers:

"The related output tax payable by the suppliers will not be affected irrespective of the fact whether tax is collected or not at source by the e-commerce operator, since charging section 9 of CGST Act, 2017 is independent of section 52… Not collecting the tax at source will have bearing on interest and penalty payable by the e-commerce operator but will have no obligation for the suppliers supplying through them."

Key takeaways

• TCS applies where the ECO is not an agent and collects the consideration.
• Rate since 10.07.2024: 0.25% + 0.25% intra-State, 0.5% inter-State. No lower rate is available, and there is no threshold.
• Collect on supply, not on payment — a January supply paid in March is a January TCS.
• No TCS on: consideration not routed through the ECO, exempt supplies, section 9(5) services, Schedule III items, non-GST supplies, reverse charge supplies, or imports.
• Net value is per supplier GSTIN, and a negative figure is ignored in that and every future period.
• GST, exempt values and income-tax TCS are excluded from the base; convenience charges may be included.
• The supplier's own liability is unaffected by the ECO's failure to collect.

Read next

• GSTR-8, GSTR-9B and Claiming TCS Credit in the Cash Ledger
• TCS Registration: REG-07, State-Wise Registration and the Foreign ECO
• Section 9(5): The Deemed Supplier, and Why It Is Not Reverse Charge

Disclaimer: Positions stated as on 5 September 2026, based on section 52 and section 15(2) of the CGST Act, 2017, Notification Nos. 51/2018 and 52/2018-Central Tax, 02/2018-Integrated Tax, 15/2024-Central Tax and 1/2024-Integrated Tax, and Circular No. 76/50/2018-GST with its corrigendum, as reproduced in the ICAI Handbook on E-Commerce Operators under GST (updated to 15 December 2025).