The Central Board of Direct Taxes (CBDT) recently issued new guidelines for the applicability of Tax deducted at Source (TDS) and Tax collected at source (TCS). According to the new guidelines, e-commerce operations which include transactions in electricity and trading of clean energy certificates (REC and ESCerts) are not subjected to TCS or TDS.
Central Board also added that the updated guidelines are applicable from 1st October, 2020.
CBDT clarified that the TCS is to be collected and paid to the government on all payments received on or after 1st October, 2020 which includes the amount of GST and on sales made prior to 1st October.
The Finance Act 2020 had imposed a levy of 1% and O.1 % on all e-commerce transactions above Rs 50 lakhs under TDS and TCS respectively.