194ia - tds on purchase of immovable property

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Ankosh (Querist)

01 August 2018 Is GST to be considered in definition of consideration value for Rs 50 Lacs limit.

Flat value without GST: Rs 49 Lacs (below 50 Lacs)
GST: Rs 5 Lacs
Flat Value including GST: Rs 54 Lacs

Here Flat value (without GST) Rs 50 Lacs. So is TDS required to be deducted ?

If there is any circular clarifying this, please share the circular number.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

01 August 2018 194 IA need not be levied on GST, because charge is on transaction value
(documented price).
Seems no circular is hosted.

Ankosh

Ankosh (Querist)

01 August 2018 Thanks Mr Warrier for the reply. While the TDS charge is on transaction value, but is TDS applicability also on transaction value ? My builder is not agreeing on deducting the TDS, hence I want a strong case to put forward my case. Any case laws on this will also suffice.

Section 194IA says consideration to exceed Rs 50 Lacs for TDS applicability.

CA Shiv Kumar Sharma

CA Shiv Kumar Sharma (Expert)

02 August 2018 As per CBDT Clarification, through Circular No. 23/2017 that if GST on services has been indicated separately in the invoice, then no tax would be deducted on GST component. Taking into light this clarification, if GST Portion is indicated separetly, you are not required to Deduct TDS on that Component.

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Ankosh

Ankosh (Querist)

05 August 2018 Thank you Mr Sharma for this circular no. This is helpful. Any case laws specifically on Rs 50 lacs limits will really be appreciated

Ankosh

Ankosh (Querist)

06 August 2018 Section 194IA mentions that 'consideration' paid to transferor should exceed Rs 50 Lacs.

Is there any definition in Income tax Act or Indian Contract Act, which has reference (any circular/case law) stating that indirect taxes paid to transferor is not part of 'consideration' value

Ankosh

Ankosh (Querist)

09 August 2018 Experts, please help. Need a circular or case law or any reference from income tax act or Indian contracts act which states that taxes are not part of consideration value

Ankosh

Ankosh (Querist)

20 August 2018 Experts kindly help. Plain reading of Sec 194IA reads "... Person responsible for paying 'any' sum by way of consideration... " Here the word used is 'any' which can include taxes. Also there is a circular which states that TDS is payable even on 'reimbursement' . Taking both these into account, is TDS applicable in the above scenario.

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