TCS under Section 206C(1H) is applicable on the amount including GST

Yes, TCS under Section 206C(1H) is applicable on the amount including GST. This is clarified through Circular No. 17/2020, dated September 29, 2020, issued by the CBDT (Central Board of Direct Taxes).

Explanation:

  • As per Section 206C(1H), TCS is to be collected on the "amount received" from the buyer.
  • The "amount received" includes GST, as GST is part of the total amount collected by the seller.

Example:

  • If the invoice value is ₹1,00,000 and GST is ₹18,000 (18%), the total amount is ₹1,18,000.
  • TCS is collected on ₹1,18,000 (including GST).

Circular Reference:

Circular No. 17/2020, Paragraph 4.4.2:

The TCS under subsection (1H) of section 206C is required to be collected with reference to the amount of sale consideration including GST, as the collection is made with reference to receipt of the sale consideration.

Key Difference with TDS Under Section 194Q:

  • For TDS under Section 194Q, the deduction is made on the amount excluding GST. This is specified because TDS is based on the amount credited in the books, which excludes GST if shown separately.

Always ensure compliance based on this clarification unless new updates or notifications are issued by the CBDT.