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Circular No. 194/06/2023-GST

File No. CBIC-20001/5/2023-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
****
New Delhi, Dated the 17
th
July, 2023
To,
The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/
Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)

Madam/Sir,
Subject: Clarification on TCS liability under Sec 52 of the CGST Act, 2017 in case
of multiple E-commerce Operators in one transaction.
Reference has been received seeking clarification regarding TCS liability under section
52 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”),
in case of multiple E-commerce Operators (ECOs) in one transaction, in the context of Open
Network for Digital Commerce (ONDC).
2.1 In the current platform-centric model of e-commerce, the buyer interface and seller
interface are operated by the same ECO. This ECO collects the consideration from the buyer,
deducts the TCS under Sec 52 of the CGST Act, credits the deducted TCS amount to the GST
cash ledger of the seller and passes on the balance of the consideration to the seller after
deducting their service charges.
2.2 In the case of the ONDC Network or similar other arrangements, there can be multiple
ECOs in a single transaction - one providing an interface to the buyer and the other providing
an interface to the seller. In this setup, buyer-side ECO could collect consideration, deduct their
commission and pass on the consideration to the seller-side ECO. In this context, clarity has
been sought as to which ECO should deduct TCS and make other compliances under section
52 of CGST Act in such situations, as in such models having multiple ECOs in a single
transaction, both the Buyer-side ECO and the Seller-side ECO qualify as ECOs as per Section
2(45) of the CGST Act.
3. In order to clarify the issue and to ensure uniformity in the implementation of
the provisions of law across the field formations, the Board, in exercise of its powers conferred
by section 168 (1) of the CGST Act, hereby clarifies the issues as under:
Issue 1: In a situation where multiple ECOs are involved in a single transaction of supply
of goods or services or both through ECO platform and where the supplier-side ECO

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himself is not the supplier in the said supply, who is liable for compliances under section
52 including collection of TCS?

Clarification: In such a situation where multiple ECOs are involved in a single transaction of
supply of goods or services or both through ECO platform and where the supplier-side ECO
himself is not the supplier of the said goods or services, the compliances under section 52 of
CGST Act, including collection of TCS, is to be done by the supplier-side ECO who finally
releases the payment to the supplier for a particular supply made by the said supplier through
him.
e.g.: Buyer-side ECO collects payment from the buyer, deducts its fees/commissions and remits
the balance to Seller-side ECO. Here, the Seller-side ECO will release the payment to the
supplier after deduction of his fees/commissions and therefore will also be required to collect
TCS, as applicable and pay the same to the Government in accordance with section 52 of CGST
Act and also make other compliances under section 52 of CGST Act.
In this case, the Buyer-side ECO will neither be required to collect TCS nor will be required to
make other compliances in accordance with section 52 of CGST Act with respect to this
particular supply.
Issue 2: In a situation where multiple ECOs are involved in a single transaction of supply
of goods or services or both through ECO platform and the Supplier-side ECO is himself
the supplier of the said supply, who is liable for compliances under section 52 including
collection of TCS?

Clarification: In such a situation, TCS is to be collected by the Buyer-side ECO while making
payment to the supplier for the particular supply being made through it.
e.g. Buyer-side ECO collects payment from the buyer, deducts its fees and remits the balance
to the supplier (who is itself an ECO as per the definition in Sec 2(45) of the CGST Act). In
this scenario, the Buyer-side ECO will also be required to collect TCS, as applicable, pay the
same to the Government in accordance with section 52 of CGST Act and also make other
compliances under section 52 of CGST Act.
4. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular.
5. Difficulty, if any, in implementation of this Circular may please be brought to the notice
of the Board. Hindi version would follow.

(Sanjay Mangal)
Principal Commissioner (GST)
Buyer
Buyer-side
ECO
Supplier-side
ECO
Supplier
Buyer
Buyer-side
ECO
Supplier (also
an ECO)