The Central Board of Indirect Taxes and Customs (CBIC) has said that the Tax Collected at Source(TCS) amount would be excluded from the value of goods while computing the Goods and Services Tax (GST) liability.It is expected to provide relief to the buyers of cars and jewellery,
Tax Collected at Source (TCS) is an income tax, collected by the seller of a specified goods,from the buyer at the time of sale of such goods.TCS is a concept where a person selling specific items is liable to collect tax from a buyer at a prescribed rate and deposit the same with the Government.
Central Board of Direct taxes(CBDT) had also said that TCS is not a tax on the goods but an interim levy on the possible “income” that could come from the sale of goods by the buyer and to be adjusted against the final income-tax liability.
Under the Income Tax Act, tax collection at source (TCS) is levied at 1% on (a)purchase of motor vehicles above Rs 10 lakh (b)jewellery exceeding Rs 5 lakh.TCS is collected by the Tax Department at varying rates based on the type of purchase.
GST (Goods and Services Tax) is an indirect tax that has replaced many Central and State taxes like excise duty,VAT and service tax. It is a single comprehensive tax levied on all goods and services produced in India as well as those imported from other countries.