Everything You Need to Know About TCS and HSN/SAC Codes in GST

The Goods and Services Tax is all set to roll out by July 01, 2017. Several new laws have been made to make the GST a comprehensive tax system. One such clause is TCS – Tax Collected at Source. While this has been deferred to a later date, this should come into place at some point in the near future.

Here are a few critical things you should know about TCS and HSN/SAC Codes in GST if you are a small business operating online.

What is TCS?

E-commerce platforms and marketplaces are required to collect 1% TCS from vendors who sell goods or services on the platform. The platform will collect 1% of the taxable amount and remit it to the governmentTCS will be reflected as an input credit in the electronic tax ledger on the GSTN. This amount is adjusted with your total output tax payable.

This has, however, been postponed by the government to ensure a smoother rollout of the GST.

Please note that you may have to get a GSTIN in the near future.

Who Should Pay TCS?

If you are a small business that has an online store or sells on platforms like Amazon, Flipkart or Instamojo, the platform will collect 1% TCS on every transaction you make on the platform and pay it on your behalf to the government.

If you have an online store with Instamojo, you will need to:

  • Provide us your GSTIN, address, and PAN.
  • Provide us the HSN/SAC Codes for your products or services listed on the store.

What are HSN/SAC Codes?

Harmonised System of Nomenclature (HSN) codes are unique numerical codes given to a type of good to help classify them for world trade. Services Accounting Codes (SAC) are unique codes given to types of services to classify them for world trade.

These codes were made by the World Customs Organization (WCO). India has been using HSN/SAC codes since 1986 to classify goods and services under central excise and customs.

These codes will help determine how much GST is to be charged for each good or service. You can find out what your HSN/SAC codes are, here.

If You Use Instamojo for Payments Only:

You will need to provide us with some simple business details, especially your address and your PIN Code, whether you have a GST number or not. You can update your details here.

Disclaimer: Information in this article is intended only to provide a general overview and is not intended to be treated as legal advice. Please consult a tax expert to get a better understanding of the GST Laws.

Don’t have your GSTIN yet? Instamojo has partnered with LegalRaasta to make your GST registration and migration easier. This is for Instamojo merchants only!

Start your Instamojo experience today.


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