GST Law has mandated a liability of 2% on e-commerce operators to collect TCS from sellers. This means Snapdeal is required to collect an amount calculated at the rate of up to 2% on the net value of taxable supplies made through it. This collected amount is called tax collection at source (TCS).
Sellers will be able to take CENVAT Credit of TCS against output liability of GST in their electronic cash ledger. Snapdeal shall submit the details of outward supplies of goods /services affected through it along with returns and TCS. These details will be matched electronically with the details submitted by seller.
The net value of taxable supplies refers to the total value of taxable supplies of goods or services or both (other than the services on which entire tax component is payable by e-commerce operator) reduced by the total value of taxable supplies returned to the suppliers during that month.
Snapdeal will be required to collect tax only on the net values of taxable supplies, i.e., values of returned supplies will be adjusted in the aggregate value of taxable supplies (provided the returns are within the same month). For buyer returns in subsequent month(s), you would be able to claim TCS deposited against goods/services supplied in the month in which return took place.
Snapdeal should collect the tax in the month in which supply was made. It should remit the amount to the Government within 10 days of the end of month in which the tax was collected.
The amount of TCS deposited by the Snapdeal with the Government will be reflected in your cash ledger (since such collection will be made on your account). You can use this at the time of discharge of tax liability with respect to the supplies.