GST Series

How to calculate TCS?

How to calculate TCS?

 TCS stands for Tax collected at Source. Here we have made an attempt to explain on “How to calculate TCS?” 

In business for certain transactions, Government expects us to withhold the taxes and pay it directly to Govt. For example Scrap sales etc.


Typically a customer who sells Scrap or some other services, needs to be charged with 1% TCS on the selling price. Now this selling price is a confusing factor as each CA / CS treats it different way. So we follow the safest and old way.

For example, we are selling the scrap of Rs 10,000 and the GST applied is GST 12%.

Now the calculation is as below.

Scrap Value           Rs 10,000

GST 12%                 Rs . 1,200

The invoice value or selling price is Rs 11200.00. So the TCS is calculated on this amount.

TCS 1% on this      Rs 112.00

Total Invoice value is Rs 11312.00

Even the new eCommerce companies have to charge 1% TCS and the transaction is some what same. Government of India has expended this to eCommerce sectors too.

A clause has been inserted in GST law for all the e-commerce aggregators like Snapdeal, Amazon, Shopclues, eBay, Flipkart etc. They are made responsible for deducting and depositing TCS tax at the rate of 1% from each of the transaction. They would need to deposit the tax deducted by the 10th day of the next month.

All the traders/dealers selling goods/services online would need to get registered under GST even if their turnover is less than 20 Lakhs for claiming the tax deducted by Ecommerce operators.


Click below to see how to create GST Invoice with Tax Collected at Source.

How to calculate the GST Purchase Receipt with TCS impact?