Compensation cess

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ANKUSH GARG (Querist)

14 January 2019 Dear All,

Someone is dealer in Motor Vehicle whose value is more than 10 lakh. He needs to charge Compensation cess @ 22% on the value of said car along with CGST and SGST and also to collect TCS @1 % under Income Tax Act.

My Question is that
1. whether the cess will be charged on the only on the value of Car
or
2. On the value of Car+ 1% TCS

Schedule -1 of GST (Compensation to State) Act, 2017 says that cess will be charged ad valorem. Please clear the meaning of it.

CA Anita Bhadra

CA Anita Bhadra (Expert)

14 January 2019 Ad Valorem means as per valuation .
Cess will be charged on transaction value
As per sec 15 of the GST Act - Transaction value includes any taxes, duties, cesses, fees and charges levied under any statute, other than GST
It cess will be charged on value of car + 1% TCS

ANKUSH GARG

ANKUSH GARG (Querist)

15 January 2019 but mam tcs is also to be collected on transaction value then it makes it to be very complicated as TCS will be charged on Value of Car+ GST and GST will be charged on Value of car+TCS

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