RAJASREE MOTORS PVT LTD and MANIKANDAN AUTHOMOBILE PVT LTD and MANIKANDAN MOTOR PVT LTD V. THE UNION OF INDIA and THE CENTRAL BOARD OF INDIRECTOR TAXES AND CUSTOMS and PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX

WP(C)/4868/2019

AI Insights

The case revolves around the question of whether the amounts of TCS collected under the Income Tax Act, 1961, should be included in the taxable value of supply under the GST regime for motor vehicle sales. The petitioners, various motor vehicle companies represented by their managing director, argued that TCS should not be part of the GST taxable value. The respondents included the Union of India and the Central Board of Indirect Taxes and Customs. The court referred to Circular No.76/50/2018-GST, which clarified that TCS should not be included in the GST taxable value, leading to the closure of the petition.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 699428 (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: RAJESH; K VENUGOPAL
• Assessee Lawyers: P GOPINATH; M GOPIKRISHNAN NAMBIAR
• Keywords: GST; Taxable Value; TCS; Supply of motor vehicles
• 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. 4868 OF 2019 PETITIONER/S: 1 RAJASREE MOTORS PVT LTD 39/3842, ALAPPAT ROAD, RAVIPURAM,ERNAKULAM KERALA-682 016,REPRESENTED BY ITS MANAGING DIRECTOR, MR. S.SIVAKUMAR 2 MANIKANDAN AUTHOMOBILE PVT LTD, 39/60598, KSN MENON ROAD, ERNKAULAM, COCHIN-682 016, REPRESENTED BY ITS MANAGING DIRECTOR, MR. S.SIVAKUMAR 3 MANIKANDAN MOTOR PVT LTD, 39/3842,ALAPPAT ROAD, MG ROAD P.O., ERNAKULAM ,KERALA- 682 016, REPRESENTED BY ITS MANAGING DIRECTOR, MR. S.SIVAKUMAR 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 T GOVERNMENT, DEPARTMENT OF REVENUE, NORTH BLOCK, NEW DELHI-110 001 2 THE CENTRAL BOARD OF INDIRECTOR TAXES AND CUSTOMS DEPARTMENT OF REVENUE, REVENUE, MINISTRY OF FINANCE,GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI-110 001 3 PRINCIIAP CHIEF COMMISSIONER OF INCOME TAX OFFICE OF THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, IS PRESS RD, ERNAKULAM, KOCHI-682 018 BY ADVS. SRI.RAJESH B., SC, CENTRAL BOARD OF EXCISE & CUSTOMS Mr.K.ARJUN VENUGOPAL, CGC SRI. C.S. MANU, DSGI SRI. SREELAL WARRIER SRI. JOSE JOSEPH, SC FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.10.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 4868 OF 2019 2 JUDGMENT 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) NO. 4868 OF 2019 3 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) NO. 4868 OF 2019 4 APPENDIX OF WP(C) 4868/2019 PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF CIRCULAR NO.76/50/2018-GST DATED 31.12.2018 "