Tax collection at source on country spirit applies only to sale price, not separately paid excise duty.

Section 206C tax collection at source on country spirit applies only to the amount payable as sale consideration to the wholesaler, because under the Bihar excise regime the retail vendor pays the cost price to the wholesaler and deposits excise duty separately into the Government treasury. The cost price and excise duty are distinct payments, and the excise duty is not part of the seller's receipt for the sale. On that statutory scheme, the amount for TCS does not include excise duty, and earlier authorities under a different legal setting do not require a broader computation.

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Issues: Whether, under section 206C of the Income-tax Act, 1961, tax collection at source on country spirit is to be computed only on the cost price payable to the wholesaler or also on the excise duty payable to the State Government.

Analysis: The substituted section 206C requires the seller to collect a percentage of the amount payable by the buyer as income-tax. On the scheme of the Bihar Excise Act, 1915 and the rules governing country spirit, the retail vendor pays the cost price to the wholesaler and deposits excise duty separately in the Government treasury. The cost price and excise duty are therefore distinct payments, and the excise duty is not part of the amount received by the seller as sale consideration. The statutory arrangement does not make the State Government a seller of the country spirit for this purpose, and the earlier authorities dealing with a different statutory setting do not compel inclusion of excise duty in the amount on which tax is collected.

Conclusion: Tax under section 206C is collectible only on the cost price of the country spirit and not on the excise duty payable to the Government.

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