Kerala High Court stays collection of GST on TCS (Income Tax) in the matter of PSN Automobiles Private Limited Vs. UOI & CBIC (Kerala High Court at Ernakulam)

CBIC vide Circular No. 76/50/2018-GST dated 31st December, 2018 clarified 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. 

Against this clarification present writ been filed and Kerala High Court has stayed the computation of GST on TCS amount vide Order dated 17^th January 2019 till disposal of the petition.  

Petitioner, has submitted that the amount of 1% the dealer collects from the purchaser of a car worth that is priced at more than Rs. 10 lacs 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 such amount ultimately is credited to the vehicle purchaser.

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