No Need to Pay GST on Tax Collected at Source on Purchase of Goods
Govt. says that from now on there will be no need to pay GST on tax at source on the purchase of goods.
TCS (Tax Collected at Source) is generally levied to a list of about 10 items which includes cars priced above Rs 1,000,000 and scrap articles.
In a clarification that resolves the ambiguity over the payment of goods and services tax (GST) on income tax collected at source (TCS) on acquisitions of preferred items, the government has stated that GST does not apply on the TCS value.
In an earlier announcement dated December 31, 2018, the central board of indirect taxes and customs (CBIC) stated that GST should be levied on the whole amount of acquisition including the value combined due to tax collected at source. TCS is usually applied to a list of approximately 10 items which comprises cars priced above Rs 1,000,000 and scrap articles.
Abhishek Jain, Tax Partner, EY, said: "This clarification appears as quite a comfort for businesses particularly the automotive division. While most industry professionals already thought that GST should not be leviable on the income tax TCS part, they were quite worried about action on this regard".