PSN  Automobiles P Ltd Vs UOI & CBIC

 

The 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. 

 

CBIC has clarified vide Circular No. 76/50/2018-GST dated 31st December, 2018 that taxable value 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. The present writ been filed against this clarification. 

 

The Kerala High Court has put on hold the computation of GST on TCS amount till disposal of the petition.