Popular Mega Motors India Private Limited V. Union of India and Central Board of Indirect Taxes and Customs and Central Board of Direct Taxes and Goods and Service Tax Council

WP(C)/5252/2019

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The case revolves around the question of whether the amounts of Tax Collected at Source (TCS) under the Income Tax Act, 1961, should be included in the taxable value of supply under the Goods and Services Tax (GST) regime for the sale of motor vehicles. The petitioner, Popular Mega Motors India Private Limited, argued that TCS should not be included in the taxable value for GST purposes. The court referenced Circular No.76/50/2018-GST, which had already addressed this issue, clarifying that TCS is not to be included in the taxable value for GST calculation. Consequently, the court found that the issue raised in the writ petition was no longer a matter for consideration and closed the petition.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 802615 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 12-10-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, CGST Act, SGST Act, UTGST Act, GST (Compensation to States) Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: P R SREEJITH; THOMAS NELLIMOOTTIL
• Assessee Lawyers: SHERRY OOMMEN; SUKUMAR OOMMEN; RAHUL PRASAD; JONATHAN PAUL ASHA ESTHER OOMMEN
• Keywords: Circular clarification; GST; Motor vehicles; Taxable Value; TCS
• Section: 15(2)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. WEDNESDAY, THE 12TH DAY OF OCTOBER 2022 / 20TH ASWINA, 1944 WP(C) NO. 5252 OF 2019 PETITIONER: 1 POPULAR MEGA MOTORS INDIA PRIVATE LIMITED, KUTTUKARAN CENTRE, MAMANGALAM, COCHIN-682025 REP. BY ITS MANAGING DIRECTOR, NAVEEN PHILIP BY ADVS. SHERRY SAMUEL OOMMEN SRI.SUKUMAR NAINAN OOMMEN SRI.RAHUL IPE PRASAD SHRI.JONATHAN PREETHAM PAUL ASHA ESTHER OOMMEN RESPONDENTS: 1 UNION OF INDIA, REPRESENTED BY SECRETARY, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, ROOM NO.46, NORTH BLOCK, NEW DELHI-110001. 2 CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, THROUGH ITS CHAIRMAN, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, NORTH BLOCK, NEW DELHI-110001. 3 CENTRAL BOARD OF DIRECT TAXES, THROUGH ITS CHAIRMAN, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, NORTH BLOCK, NEW DELHI-110001. 4 GOODS AND SERVICE TAX COUNCIL, THROUGH ITS SECRETARY, 5TH FLOOR, TOWER II, JEEVAN BHARTI BUILDING, JANPATH ROAD, CONNAUGHT PLACE, NEW DELHI-110001. BY ADVS. SRI.P.R.SREEJITH, SC, CENTRAL BOARD OF EXCISE AND CUSTOMS THOMAS MATHEW NELLIMOOTTIL THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.10.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC No.5252 of 2019 2 JUDGMENT Dated this the 12th day of October, 2022 This writ petition raises the question as to whether the amounts of TCS collected under the provisions of the Income Tax Act, 1961 can form part of the taxable value of supply under the GST regime during the course of sale of motor vehicles. It is the contention of the petitioner that the amount of TCS collected under the provisions of the Income Tax Act cannot from part of the taxable value for the purpose of collection of GST. 2. When this matter is taken up for consideration today, it is not disputed before me that the issue has now been clarified by issuance of Circular No.76/50/2018-GST-Central Tax as corrected by corrigendum No.76/50/2018-GST (F.No. 20/16/04/2018-GST), dated 07.03.2019 which clarifies that the amounts of TCS collected under the WPC No.5252 of 2019 3 provisions of the Income Tax Act will not form part of the taxable value for the purpose of determination of the amount of GST to be paid on the sale of motor vehicles. 3. The circular dated 31.12.2018 as corrected by corrigendum No. 76/50/2018-GST (F.No. 20/16/04/2018-GST), to the extent it is relevant reads as follows: 5. What is the correct valuation methodology for ascertainment of GST on Tax collected at source (TCS) under the provisions of the Income Tax Act, 1961? 1. Section 15(2) of CGST Act specifies that the value of supply shall include “any taxes, duties cesses, fees and charges levied under any law for the time being in force other than this Act, the SGST Act, the UTGST Act and the GST (Compensation to States) Act, if charges separately by the supplier.” 2. For the purpose of determination of value of supply under GST, Tax collected at source (TCS) under the provisions of the Income Tax Act, 1961 would not be includible as it is an interim levy not having the character of tax. In the light of the above, I am of the opinion that WPC No.5252 of 2019 4 the issue raised in this writ petition no longer arise for consideration. The writ petition is closed making it clear that the issue will stand governed by the Circular dated 31.12.2018 [76/50/2018-GST-Central Tax] as corrected by corrigendum issued on 07.03.2019 [corrigendum No.76/50/2018-GST (F.No. 20/16/04/2018-GST)]. Sd/- GOPINATH P. JUDGE SKP/12-10 WPC No.5252 of 2019 5 APPENDIX OF WP(C) 5252/2019 PETITIONER'S EXHIBITS: EXHIBIT P1 A TRUE COPY CIRCULAR NO.76/50/2018-GST DATED 31.12.2018 EXHIBIT P2 A TRUE COPY ORDER DATED 17.1.2019 IN WPC.680/2019 RESPONDENTS' EXHIBITS:NIL TRUE COPY P.A.TO JUDGE "