Case Law Details
PSN Automobiles Private Limited Vs. UOI & CBIC (Kerala High Court at Ernakulam)
Petitioner, has submitted that the amount of 1% the dealer collects from the purchaser of a car worth more than ten lakhs, under Section 206C(1F) of the Income Tax Act, cannot be treated as an integral part of the value of the goods and services supplied by the petitioner. According to him, the petitioner, as the dealer of the motor vehicle, acts only as an agent for the State to collect the income tax under Section 206C(1F). And that amount will eventually goes to the vehicle purchaser’s credit.
Earlier CBIC has clarified vide Circular No. 76/50/2018-GST dated 31st December, 2018 that taxablevalue for the purposes of GST shall include the TCS amount collected under the provisions of the Income Tax Act since the value to be paid to the supplier by the buyer is inclusive of the said TCS. Against this clarification present writ been filed and Kerala High Court has put on hold the computation of GST on TCS amount till disposal of the petition.
FULL TEXT OF THE HIGH COURT JUDGMENT / ORDER IS AS FOLLOWS:
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It’s a deeper legal issue. Logically TCS should be excluded from value of services as it is not being charged from customer for goods but because of a requirement of law it is being collected and deposited in the income tax account of customer. So it should be excluded. Gst act should be amended or be interpreted this way
It is the Income Tax Department which is using the services of the dealer to collect tax on its behalf.Why shouldn’t the IT dept pay the Service Tax onunder GST.
This judgement is against the concept of GST.
GST concept is not to charge tax on tax and avoid double taxation.
Exhibit of real Invoice by example could have been shown for readers understanding and the contention raised in the petition.
is it applicable on Goods and service or only on motor vehicle in Delhi?