Besides auto, this kind of TCS is also imposed on sale of scrap and bullion above Rs two lakh
In a temporary relief to the auto industry among others, the Kerala high court has stayed the imposition of goods and services tax (GST) on tax collected at source (TCS).
There is a provision under income tax to impose TCS on certain high value goods including sale of cars above Rs 10 lakh. TCS at the rate of one per cent is imposed on automobiles.
TCS is collected to identify purchasers of high value goods and is adjusted to the income tax payment of of these buyers.
Last month, the Central Board of Indirect Taxes and Customs (CBIC) came out with a cricular on imposing GST on this TCS.
However, auto players resented this, saying TCS is not consideration of cars, so there is no logic to include GST on it. GST up to 48 per cent apply to luxury cars. As such, that much tax was to be imposed on TCS on these cars.
Abhishek Jain, tax partner EY, said,” The court’s direction to stay any actions by the government on inclusion of TCS for the purpose of GST brings a significant gleam of hope for various industry players, in specific, the auto industry.”
Besides auto, this kind of TCS is also imposed on sale of scrap and bullion above Rs two lakh.
Source : https://www.business-standard.com/article/economy-policy/kerala-high-court-stays-gst-on-tax-collected-at-source-on-cars-119012100008_1.html