The Central Board of Indirect Taxes and Customs (CBIC) had vide Circular No. 76/50/2018-GST dated 31st December, 2018, clarified that the taxable value for the purposes of GST shall include the Tax Collected at Source (TCS) amount collected under the provisions of the Income Tax Act. However, considering the representations received from stakeholders and after consulting with Central Board of Direct Taxes (CBDT), CBIC has issued a corrigendum against the aforesaid circular. Since, TCS is not in nature of any tax, its an interim levy, hence same shall not be included for computation of GST. Hence, GST is to be computed only on basic value excluding TCS. This shall give much needed relief to Auto Industry as well as other industries.

The summary of the aforesaid corrigendum has been given in a tabular manner for easy understanding:

GST – Corrigendum to GST Circular:

S. No Circular No Summary of the Corrigendum
1. Corrigendum No F. No. 20/16/04/2018 -GST dated 7th March 2018 issued for Circular No 76/50/2018-GST dated 31st December 2018 Amended Circular –

What is the correct valuation methodology for ascertainment of GST on Tax collected at source (TCS) under the provisions of the Income Tax Act, 1961?

1. Section 15 of the CGST Act deals with Valuation of Goods or Services or Both. Subsection (2) to Section 15 specifies that the value of supply shall include “any taxes, duties cesses, fees and charges levied under any law, other than this Act.

2. For the purpose of determination of value of supply under GST, Tax collected at source (TCS) 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.

Note – This is for information only. For exact details of changes, the notification/Circular may please be referred to, as and when they are issued.

Update Source: Corrigendum No F. No. 20/16/04/2018 -GST dated 7th March 2018 issued for Circular No 76/50/2018-GST dated 31st December 2018.

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