TCS on motor vehicle u/s 206C(1F) of the Income Tax Act not integral part of the value of the goods and services supplied – High Court admits Petition
ABCAUS Case Law Citation:
ABCAUS 2734 (2019) (01) HC
Section 15 of the Goods and Services Tax Act speaks of the value of goods and services, besides defining how the value of supply shall be reckoned.
It says that the value of supply of goods, services, or both shall be the· transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply.
Section 15(2) mandates that the value of supply shall include any taxes, duties, cesses, fees and charges levied under any other law in force.
The case of the Petitioner was that the amount of 1% the dealer collects from the purchaser of a car worth more than ten lakhs, under Section 206C(1F) of the Income Tax Act, cannot be treated as an integral part of the value of the goods and services supplied by the petitioner.
It was submitted that the Petitioner, as the dealer of the motor vehicle, acts only as an agent for the State to collect the income tax under Section 206C(1F). And that amount will eventually goes to the vehicle purchaser’s credit.
The Petitioner relied upon the last portion of Section 15(2)(a), which emphasises “charging of tax, duties, cess or fee by the_supplier“.
The Hon’ble High Court observed that recently a constitution Bench of the Hon’ble Supreme Court held that any ambiguity in taxing provision should be resolved in the State’s fare.
However, the Court admitted the Petition stating that the petitioner had raised a prima facie issue, which needed Court’s attention for further and deeper adjudication.
The High Court directed that the authority will not act on the issue till the disposal of the writ petition.
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