TCS ON SALE OF GOODS TO BE INCLUSIVE OF GST OR EXCLUSIVE OF GST

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This discussion clarifies whether Tax Collected at Source (TCS) on the sale of goods should be calculated on the basic amount or the total bill amount, including GST. According to CBDT Circular 17, TCS should be collected on the total bill amount. However, for Tax Deducted at Source (TDS) under Section 194Q, CBDT Circular 13 of 2021 specifies that TDS is deducted on the amount excluding GST if the GST component is separately indicated and tax is deducted at the time of credit. If deducted on payment basis, it's on the whole amount.

CA SASHI KANT SHARMA

CA SASHI KANT SHARMA (Querist)
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08 July 2021 Dear sir,
please resolve my doubt on whether TCS on Goods Sale of goods to be on basic amount or Total Bill Amount including of GST ??

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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08 July 2021 Collect TCS on total bill amount. inference :- Circular 17 of CBDT.

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CA SASHI KANT SHARMA

CA SASHI KANT SHARMA (Querist)
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15 July 2021 sir please clarify whether TDS U/S 194Q Would be on value including GST Or on value excluding GST.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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16 July 2021 4.3.2 Accordingly with respect to TDS under section 194Q of the Act, it is clarified that
when tax is deducted at the time of credit of amount in the account of seller and
in terms of the agreement or contract between the buyer and the seller, the component of GST comprised in the amount payable to the seller is indicated separately, tax shall be deducted under section 194Q of the Act on the amount credited without including such GST.
However, if the tax is deducted on payment basis because the payment is earlier than the credit, the tax would be deducted on the whole amount as it is not possible to identity that payment with GST component of the amount to be invoiced in future.

Ps:- Extraction from CBDT Circular 13 of 2021

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