Circular No.: 76/50/2018-GST (as amended)
Date of Circular: 31st December 2018
Date of Corrigendum: 7th March 2019
Relevant Sections and Rules:
- CGST Act, 2017:
- Section 15(2): Value of supply
- Income Tax Act, 1961:
- Section 206C: Tax Collected at Source (TCS)
Corrigendum Summary (Impacting Point 5 of Circular):
Original clarification under point 5 of Circular No. 76/50/2018-GST stated that:
TCS collected under the Income Tax Act shall be included in the value of supply for GST purposes, since the recipient pays it as part of consideration.
Revised Position after Corrigendum:
- After re-examination and consultation with the Central Board of Direct Taxes (CBDT), it is now clarified that:
- TCS under the Income Tax Act, 1961 is not to be included in the value of supply for GST.
- This is because TCS is not a tax on goods, but an interim levy on potential income, to be adjusted against the buyer’s income tax liability.
Final Clarification:
For GST valuation purposes under Section 15(2), TCS under Income Tax Act is not includible in the taxable value, as it lacks the character of a tax on goods/services.
