What is the Full Form of TCS in GST?
TCS full form in GST is Tax Collected At Source, which is a pretty similar concept as TDS of Tax Deducted At Source. However, TCS is basically the tax that sellers need to collect from the buyer and then submit to the government. Under Section 206 C Income Tax Act, 1961, there are many items mentioned on which the TCS percentage is different. In short, for various goods categories, the TCS may differ.
TCS Practical Example
Let’s understand TCS with a practical example. Suppose there is a transaction happening between person A and B. Here, person A is actually the seller, and B is the buyer or consumer. So when the buyer or person B will buy an item from person A or the seller, TCS will be applicable. For example, if the transaction amount or cost of the goods is 1000 rupees, and the TCS or tax collected at the source is 2.5%, then the buyer or person B will need to pay 1025 rupees. After collecting 1025 rupees, the seller will need to pay back the 25 rupees collected from the buyer to the government. If the buyer doesn’t pay the TCS, then he/she will not be able to transact with the seller.