GSTN issued advisory on GSTR 8 changes!

CBIC reduced the rate of TCS under GST from 1% to 0.50% vide Notification No. 15/2024 dated 10.07.2024. As per original Notification No. 52/2018 - Central Tax, every electronic commerce operator, not being an agent, shall collect TCS on the net value of intra-state taxable supplies made through it by other suppliers where the consideration for such supplies is to be collected by the said operator. Its rate was 1% (0.50% CGST and 0.50% SGST) earlier, which is now reduced to 0.50%  (0.25% CGST and 0.25% SGST).

Form GSTR 8 is to be filed every month by the e-commerce operators who are required to deduct TCS under GST. GSTR-8 contains the details of supplies affected through the e-commerce platform and the amount of TCS collected on such supplies.

GSTN has issued an advisory on 2^nd August 2024 relating to changes in GSTR 8.

Let's understand the changes!

Advisory dated 02^nd August 2024

Advisory in respect of Changes in GSTR 8

Aug 2nd, 2024

Please refer to the GST Council decision to the effect that the TCS rate has been reduced from the current 1% (0.5% CGST + 0.5% SGST/UTGST, or 1% IGST) to 0.5% (0.25% CGST + 0.25% SGST/UTGST, or 0.5% IGST) effective from 10/07/2024 vide Notification No. 15/2024 dated 10.07.2024.

Thus, the following important aspects regarding the TCS rates effective from 10.07.2024 are to be noticed:

1.   Period from 1st July to 9th July 2024:

    •  During this period, the old TCS rate of 1% will continue to apply. Taxpayers are required to collect & report TCS at this rate for all transactions that happened between these dates.

2.   From 10th July 2024 onwards:

    •  A revised TCS rate of 0.5% will come into effect from 10th July 2024. Taxpayers must ensure their systems and processes are updated to reflect this new rate for all transactions that happened from 10th July forward.

Further, as few taxpayers have reported validation errors while filing GSTR-8 for July 2024, it is to inform you that the GSTN team is working on the changes announced by the GST Council in respect of GSTR 8, which is expected to be complete in the next couple of days, and users would be able to file returns from 06th August 2024 midnight onwards. Any inconvenience caused in this regard is regretted.

Thank you,
Team GSTN

Key takeaways from the advisory

• In Form GSTR 8 of July 2024, TCS is to be shown as follows:

• GSTN is in the process of removing the validation errors due to rate changes. 
• Taxpayers shall wait till the changes are done. GSTR 8 due date for July 2024 is 10^th August 2024.

Conclusion

The reduction in TCS rates from 1% to 0.5%, effective from 10th July 2024, necessitates immediate updates to systems and processes to ensure compliance. Taxpayers need to be mindful of the two distinct periods in July 2024, where different TCS rates apply, and accurately report these in their GSTR 8 filings.

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