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2019 (1) TMI 1022 - HC - GSTValuation of supply - motor vehicle - inclusion of tax collected at source (TCS) u/s 206C of income tax in the value of goods and services - charging of tax, duties, cess or fee by the supplier - Held that - The authority will not act on the clarification at Sl.No.5 of Ext.P1 pending the disposal of the writ petition - however, this arrangement shall be subject to the outcome of the writ petition and without prejudice to the rights of the Department in collecting the taxes in future if the writ outcome is adverse to the petitioner - petition disposed off.
Issues: Interpretation of Section 15 of the Goods and Services Tax Act regarding the inclusion of taxes in the value of supply.
In this judgment, the court delves into the interpretation of Section 15 of the Goods and Services Tax Act, which deals with the determination of the value of goods and services for taxation purposes. Section 15(2) specifically mandates that the value of supply must encompass any taxes, duties, cesses, fees, and charges levied under other prevailing laws. The petitioner, represented by a Senior Counsel, argues that the 1% amount collected from car purchasers under Section 206C(1F) of the Income Tax Act should not be considered as part of the value of goods and services supplied. The petitioner contends that they act merely as an agent for the State to collect income tax, and the amount collected ultimately benefits the purchaser. The court acknowledges the expansive nature of Section 15(2)(a) and references a recent Supreme Court judgment emphasizing that any ambiguity in taxing provisions should be resolved in favor of the State. However, the court notes the need for further adjudication to conclusively determine the issue raised by the petitioner. Consequently, the court decides that the authority should not act on a specific clarification pending the disposal of the writ petition. The court clarifies that this decision is provisional and subject to the outcome of the writ petition, without prejudicing the Department's rights to collect taxes in the future if the writ petition ruling is unfavorable to the petitioner. Overall, the judgment highlights the complexity of interpreting tax laws, particularly in determining the inclusion of various taxes in the value of supply under the Goods and Services Tax Act. The court's decision to withhold action on a clarification pending further adjudication demonstrates a cautious approach to ensuring a fair resolution of the legal issues raised by the petitioner.
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