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TDS VS TCS

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Khush Trivedi

4156 Points Posted on 07 June 2024

As we all are aware that TDS should be deducted on BASIC amount i.e. excluding GST but In case of TCS it should be collected on invoice value

can anyone explain why there is difference between these

Thanks in advance

Replies (4)

Quick Summary

This discussion clarifies the difference in how TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) are applied, particularly concerning GST. While TDS is typically deducted on the basic amount excluding GST, TCS, according to CBDT guidelines, is collected on the total invoice value, including GST. This distinction arises from specific FAQs issued by the CBDT regarding Section 206C(1H), which mandates TCS collection based on the receipt of sale consideration.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

212424 Points Posted on 08 June 2024

Ideally, it should not have been collected over GST, if GST be charged separately.

But the confusion started by release of FAQ over sec. 206C(1H) by CBDT..... (extracted below)

"" 7. Whether TCS would be collected on Sale Value including GST or excluding GST?

As per the Guidelines issued by CBDT vide Circular No. 17 of 2020 dated 29.09.2020, no adjustment on account of sales return, discount or indirect taxes including GST are required to be made for the collection of tax under sub-section (1H) of section 206C of the Act since collection is made with reference to receipt of amount of sale consideration. Therefore, TCS shall be collected on the sale value including GST. For instance, if the value of goods mentioned in the Invoice is Rs. 100 and GST @ 18% has been charged on the same then TCS is to be collected on the total amount of Rs. 118 and not Rs. 100. """

Thereafter no more amendment ...............