Valuation Mechanism in GST for product where TCS is attracted under IT Act.

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Valuation Mechanism in GST

CGST Circular – 76

  • What is the correct valuation methodology for ascertainment of GST on Tax collection on source (TCS) under the provision of Income Tax Act, 1961
  •  It is clarifies that as per the above provisions, taxable value for the purposes of GST shall include the TCS amount collected under the provisions of the Income Tax Act since value to be paid to the supplier by the buyer inclusive of the said TCS (Section 15(2) – taxes under other Act)  

 

Present Mechanism

Mechanism after Circular No 76

Particulars

Qty

Rate

Amount

Particulars

Qty

Rate

Amount

Differenc

Coal

500

3000

1500000

Coal

500

3000

1500000

 

Total

Total(A)

 

1500000

Total

Total(A)

 

1500000

0

 

 

 

 

TCS

1%

 

15000

15000

 

Value for GST

 

1500000

 

Value for GST

 

1515000

 

CGST

2.50%

 

37500

CGST

2.50%

 

37875

375

SGST

2.50%

 

37500

SGST

2.50%

 

37875

375

Cess

400

 

200000

Cess

400

 

200000

0

 

Total GST (B)

 

275000

 

Total GST (B)

 

275750

750

 

Inv Value(A+B)

 

1775000

 

Inv Value(A+B)

 

1790750

15750

TCS

1%

 

17750

 

 

 

 

-17750

 

Gross Value

 

1792750

 

Gross Value

 

1790750

-2000

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