Collection of tax at source by Tea Board of India. - GST - States - 12-19/2017-18-EXN-GST-(519)- 32671-743

Circular No. 74/2018-GST Circular No. 12-19/2017-18-EXN-GST-(519)- 32671-743 Government of Himachal Pradesh, Excise and Taxation Department To 1. The Additional Commissioner of State Taxes and Excise, South Zone, Shimla-9, H.P. 2. The Deputy Commissioner of State Taxes and Excise, Central Zone, North Zone, Flying Squad NZ/ SZ/ CZ. 3. The Asstt. Commissioner of State Taxes and Excise, Shimla, Solan, BBN Baddi, Sirmour, Bilaspur, Hamirpur, Mandi. Kullu, Chamba, Kangra, Revenue Distt Nurpur and Una, H.P 4. The Asstt. Commissioner of State Taxes and Excise, Incharge Distt. Kinnour, H.P Dated Shimla-9 the 19th Nov., 2018. Subject: Collection of tax at source by Tea Board of India Reg. Tea Board of India (hereinafter referred to as the, Tea Board ), being the operator of the electronic auction system for trading of tea across the country including for collection and settlement of payments, admittedly falls under the category of electronic commerce operator liable to collect Tax at Source (hereinafter referred to as, TCS ) in accordance with the provisions of section 52 of the Himachal Pradesh Goods and Service Tax Act, 2017 (hereinafter referred to as, the HPGST Act ). 2. The participants in the said auction are the sellers i.e. the tea producers and auctioneers who carry out the auction on behalf of such sellers and buyers. 3. It has been observed that the buyers in the said auction make payment of a consolidated amount to an escrow Account maintained by the Tea Board. The said consolidated amount is towards the value of the tea, the selling and buying brokerages charged by the auctioneers and also the amount charged by the Tea Board from sellers, auctioneers and buyers. Thereafter, Tea Board pays to the sellers (i.e. tea producers), from the said escrow account, for the supply of goods made by them (i.e. tea) and to the auctioneers for the supply of services made by them (i.e. brokerage). Under no circumstances, the payment is made by the Tea Board to the auctioneers on account of supply of goods i.e., tea sold at auction. 4. In view of the above, a question has been arisen whether Tea Board should collect TCS under section 52 of the HPGST Act from the sellers of tea (i.e. the tea producers), or from the auctioneers of tea or from both. 5. In exercise of the powers conferred under section 168 of the HPGST Act, for the purpose of uniformity in the implementation of the Act, it is hereby clarified, that TCS at the notified rate, in terms of section 52 of the HPGST Act, shall be collected by Tea Board respectively from the - (i) sellers (i.e. tea producers) on the net value of supply of goods i.e. tea; and (ii) auctioneers on the net value of supply of services (i.e. brokerage). 6. It is requested that suitable trade notices may be issued to publicize the contents of this Circular. 7. Difficulties faced, if any, in implementation of the above instructions may please be brought to the notice of the Headquarter. (Devesh Kumar, IAS) Commissioner of State Tax and Excise, Himachal Pradesh