PSN Automobiles Private Limited and Popular Vehicles and Service Ltd V. The Union of India and The Central Board of Indirect Taxes and Customs and The Central Board of Direct Taxes and Goods and Service Tax Council

WP(C)/680/2019

AI Insights

The case involves two writ petitions filed by PSN Automobiles Private Limited and Popular Vehicles and Service Ltd against the Union of India and other respondents, concerning the inclusion of TCS collected under the Income Tax Act in the taxable value for GST purposes on motor vehicle sales. The petitioners argued that TCS should not be included in the GST calculation. The court referred to Circular No.76/50/2018-GST, which clarified that TCS is not to be included in the taxable value for GST purposes. Consequently, the court found that the issue raised in the petitions was resolved by the circular and closed the petitions accordingly.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 802607 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 14-10-2022
• 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: C S MANU; SREELAL WARRIER
• Assessee Lawyers: P GOPINATH; M GOPIKRISHNAN NAMBIAR
• Keywords: GST; Motor vehicles; Taxable Value; TCS; Circular No.76/50/2018-GST
• Section: 15(2)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. FRIDAY, THE 14TH DAY OF OCTOBER 2022 / 22ND ASWINA, 1944 WP(C) NO. 680 OF 2019 PETITIONER/S: PSN AUTOMOBILES PRIVATE LIMITED 34/652 C, CIVIL LINE ROAD, PADIVATTOM, EDAPPALLY P.O., COCHIN-682024 REPRESENTED BY ITS CHIEF FINANCIAL OFFICER, MR.MATHEW GEORGE. BY ADVS. SRI.P.GOPINATH (SR.) SRI.M.GOPIKRISHNAN NAMBIAR SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM RESPONDENT/S: 1 THE UNION OF INDIA REPRESENTED BY THE SECRETARY TO GOVERNMENT, DEPARTMENT OF REVENUE, NORTH BLOCK, NEW DELHI-110 001. 2 THE CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI 110 001. SRI. C.S. MANU – DSGI, SRI. SREELAL WARRIER, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.10.2022, ALONG WITH WP(C).5211/2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) Nos.680 & 5211 OF 2019 2 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. FRIDAY, THE 14TH DAY OF OCTOBER 2022 / 22ND ASWINA, 1944 WP(C) NO. 5211 OF 2019 PETITIONER/S: M/S.POPULAR VEHICLES AND SERVICE LTD KUTTUKARAN CENTRE, MAMANGALAM, COCHIN-682025.,REP BY ITS DIRECTOR NAVEEN PHILIP. BY ADVS. SHERRY SAMUEL OOMMEN SRI.SUKUMAR NAINAN OOMMEN SRI.RAHUL IPE PRASAD SHRI.JONATHAN PREETHAM PAUL ASHA ESTHER OOMMEN RESPONDENT/S: 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 RAJESH. K.RAJU SRI. SREELAL WARRIER SRI. CHRISTOPHER ABRAHAM -SC SRI. C.S. MANU, ASGI THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.10.2022, ALONG WITH WP(C).680/2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) Nos.680 & 5211 OF 2019 3 JUDGMENT [WP(C) Nos.680/2019, 5211/2019] 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 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: WP(C) Nos.680 & 5211 OF 2019 4 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 the issue raised in this writ petition no longer arises for adjudication. 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 ajt WP(C) Nos.680 & 5211 OF 2019 5 APPENDIX OF WP(C) 5211/2019 PETITIONER EXHIBITS EXHIBIT P1 A TRUE COPY OF CIRCULAR NO.76/50/2018-GST DATED 31.12.2018. EXHIBIT P2 A TRUE COPY OF ORDER DATED 17.01.2019 IN WPC NO.680/2019. WP(C) Nos.680 & 5211 OF 2019 6 APPENDIX OF WP(C) 680/2019 PETITIONER EXHIBITS EXHIBIT P1 TRUR COPY OF CIRCULAR NO.76/50/2018-GST DATED 31.12.2018. "