Road to buy cars priced above Rs 10 lakh just got smoother! Check big money-saving good news for you
CBIC has made it clear that TCS won't be added to the sticker value before the GST calculation, which leads to savings for the customers about 1% in their payout.
Luxury cars above Rs 10 lakh: After clarification by the Central Board of Indirect Taxes and Customs (CBIC) on luxury cars with sticker price above Rs 10 lakh, the luxury cars falling in the above-mentioned segment may cost lesser up to Rs 1 lakh. Earlier, under the Income Tax Act norms, people purchasing luxury cars with sticker value of higher than Rs 10 lakh had to pay a levy of 1 per cent in the form of TCS (Tax Collected at Source). This norm still stays, but the CBIC has made it clear that TCS won't be added to the sticker value before the GST calculation, which leads to savings for the customers about 1 per cent in their payout.
According to the CBIC as quoted by the Financial Express, "For the purpose of determination of the 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 the tax."
The CBIC clarification comes after a notice in December that the CBIC had said that the TCS amount would also be included while calculating the GST on items on which TCS is applicable under the Income Tax Act.
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So, if someone buys a car costing Rs 10 lakh, he or she can save around Rs 10,000 now. As the luxury cars cost in crores or more than crores, a high-end luxury car buyer can now save up to Rs 1 lakh or more.