Majority of Business Expenses are liable for tax under Reverse Charge Mechanism (RCM) in GST. Even though liability to pay tax under RCM is in the hands of service receiver under GST, in practice such registered dealers are collecting tax from the service provider while making payments to them. Here the registered dealer under GST who is liable to pay RCM assigning the tax liability under GST to the small service provider. Ex:- Bankers are collecting 10% TDS Income-tax & 18% GST total 28% from pigmy agents on commission paid, who are struggling to meet their livelihood. This is a clear case to show that Indian GST is a DRACONIAN law.
Attached below the details of Business Expenses liable for tax with particulars of rates under Goods and Service Tax Act of India. I am of the strong view that such Business Expenses should not be subject to Tax Deduction at Source once again under Indian Income-Tax Act. Therefore, TDS provision as applicable to Business Expenses list furnished in the enclosed attachment, no longer required in the statute book of Indian Income-Tax Act.
TDS is required to be made on whole value of such Business Expenses incurred by the assesse under Income-Tax Act. Further, GST on Business Expenses under Reverse Charge Mechanism resulting in one more Tax Deduction at Source in GST as explained above. Therefore, CBDT should withdraw TDS Provision under Income-Tax Act on such Business Expenses liable for RCM under GST to avoid future complication & also to up hold constitutional validity of TDS Provision under Income-Tax Act.
B.S.K.RAO, Tax Advocate, BDKRAO, Beside SBI, Tilak Nagar, Shimoga-577201, Karnataka State
Mo.No. : 9035089036
E-Mail : email@example.com