TCS Under Section 52 Of CGST Act, 2017 – A Toothless Provision?

Absence of recovery mechanism in case of default

The effectiveness of any statutory obligation to collect an amount, hinges entirely on the existence of express recovery provision in the case of default. 

The scheme of Tax Collection at Source (‘TCS’) under Section 52 of the CGST Act, 2017 deserves closer attention, particularly from the standpoint of its enforceability, in the absence of any express recovery mechanism under the CGST Act or Rules framed thereunder. 

What is Section 52 of CGST Act, 2017?

Section 52 of the CGST Act, 2017 introduces a special compliance framework, applicable to e-commerce operators facilitating taxable supplies through their digital platforms. It obligates operators to collect an amount not exceeding one per cent., of the net value of taxable supplies made through it by other suppliers. The amount so collected shall be paid to the Government within the prescribed time.