New Delhi: CBIC – The Central Board of Indirect Taxes and Customs gives a big relief to buyers of jewellery and expensive cars by regulating that the TCS (Tax Collected at Source) amount would be excluded from the value of goods for calculating GST (Goods and Services Tax) liability.
Under the Income Tax Act of India, TCS – tax collection at source is levied at 1% on purchase of motor vehicles more than Rs 10 lakh, bullion over Rs 2 lakh and jewellery exceeding Rs 5 lakh. TCS (Tax Collected at Source) is also levied on other buying at different rates.
The CBDT (Central Board of Indirect Taxes and Customs) has clarified that TCS (Tax Collected at Source) is not a tax on goods but an interim levy on the possible “income” rising from the sale of goods by the purchaser and to be adjusted against the final income-tax liability.
According to CBIC “For the purpose of determination of the value of supply under (Goods and Services Tax) GST, Tax collected at source under the provisions of the Income Tax Act, 1961 would not be includible as it is an interim levy not having the character of tax,”
Earlier in the month of December, the CBIC had said that the TCS (Tax Collected at Source) amount would also be included while determining the GST (Goods and Services Tax) liability on goods on which Tax Collected at Source is applicable under the I-T Act.
But after discussion with the Central Board of Direct Taxes (CBDT), the CBDT (Central Board of Indirect Taxes and Customs) has decided to exclude the TCS amount paid while valuing the goods for the purpose to levy (Goods and Services Tax) GST.