This circular provides clarification on the manner of collection of tax at source (TCS) by the Tea Board of India in its capacity as an electronic commerce operator under section 52 of the CGST Act.

It clarifies that the Tea Board of India operates an electronic auction platform for trading of tea and facilitates collection and settlement of payments through an escrow account. Buyers deposit a consolidated amount covering the value of tea, brokerage charged by auctioneers, and charges levied by the Tea Board. Payments to tea producers and auctioneers are subsequently made from this escrow account.

The circular clarifies that TCS is required to be collected separately on different supplies made through the auction platform. The Tea Board shall collect TCS from tea producers on the net value of supply of goods, namely tea. Separately, TCS shall be collected from auctioneers on the net value of supply of services, being brokerage services provided by them.

It is further clarified that since auctioneers do not supply tea as goods, no TCS is required to be collected from them in respect of the value of tea sold at auction. The clarification aims to ensure uniform implementation of TCS provisions in electronic tea auctions.