One of the recent amendments announced by the GST is the extra GST that you will now have to pay on the Tax Collected at Source by the automobile dealer.
The government has said that the GST will be charged not just on the invoice value but also the TCS value collected.
TCS is applicable at the rate of 1% on automobiles with value over Rs. 10 lakhs and applicable on the ex-showroom price.
"It is clarified that… taxable value for the purposes of GST shall include the TCS amount collected under the provisions of the Income Tax Act since the value to be paid to the supplier by the buyer is inclusive of the said TCS,” the CBIC said in a circular.
This clarification issued by the CBIC will directly impact the cost of the cars thereby making it even heavier on the pocket for the consumers. Also, it will adversely impact the automobile industry.
The experts have put forward their opinion on the same. According to them, this is an unnecessary burden on the consumers, since TCS is not a consideration value and hence should not be included while calculating the GST. It is merely a collection of income tax on behalf of the buyer and therefore should not form a part of the consideration for the purpose of GST calculation.
According to a leading tax expert, the government should reconsider this notification and revise it for the correct computation of GST to reduce the inessential burden from the taxpayers.
CAclubindia
