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This discussion clarifies the correct method for calculating Tax Collected at Source (TCS) and Tax Deducted at Source (TDS) in relation to Goods and Services Tax (GST). The Central Board of Direct Taxes (CBDT) has confirmed that TCS should be applied to the entire sale consideration, which includes the GST amount. Therefore, if an invoice totals £55 lakhs including £10 lakhs GST, TCS is levied on the full £55 lakhs.

Daya

Daya (Querist)
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07 January 2025 please reply
section 206 TCS
Assessable Value
GST on assessable value
TCS levy on Assessable Value
Invoice value

Section 194 Q TDS deduction
TDS deduction 194 q ( Total Invoice Value Less 50 Lakh and GST amount)

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 January 2025 The Central Board of Direct Taxes (CBDT) has clarified that TCS should be calculated on the sale consideration inclusive of GST. This means if a buyer pays ₹55 lakhs, which includes ₹10 lakhs as GST, TCS will apply to the entire ₹55 lakhs, not just the base amount.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 January 2025 Section 194 Q TDS deduction
TDS deduction 194 q ( Total Invoice Value Less 50 Lakh and GST amount)

Correct.

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