GST collected on service invoices excluded from "gross receipts" for presumptive income u/s44BB; tax credit to be verified

GST collected on services was held not to constitute "gross receipts" for presumptive taxation under s. 44BB of the Income-tax Act, as it is a statutory levy collected on behalf of the Government and not consideration for the services; accordingly, the AO was directed to exclude the GST component while computing presumptive income, and the appeal was allowed on this issue. On credit for advance tax, where the assessee claimed higher payment than the credit granted, the AO was directed to verify the additional deposit and, if found correct, grant corresponding credit; the ground was allowed for statistical purposes.

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1. ISSUES PRESENTED AND CONSIDERED

1. Whether Goods and Services Tax (GST) collected by the assessee is to be included in "gross receipts"/specified amounts for computing presumptive income under section 44BB of the Income-tax Act, 1961.

2. Whether the assessee is entitled to full credit of advance tax claimed, where the Assessing Officer allowed credit only partially, and what directions are warranted.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Inclusion of GST in gross receipts for section 44BB computation

Legal framework (as discussed by the Court): The Court treated section 44BB as a presumptive taxation provision requiring computation on the basis of specified amounts (gross receipts) and followed coordinate bench decisions applying the principle that statutory indirect taxes collected separately do not constitute income/receipts "on account of" the relevant services for presumptive computation. The Court proceeded on the basis that the issue is covered by earlier Tribunal decisions on the same question.

Interpretation and reasoning: The Court accepted that GST, when collected as a statutory levy and shown separately in invoices, does not form part of the gross receipts for presumptive taxation under section 44BB. It relied on the binding force of coordinate bench rulings which had already held that GST is not a revenue element but a statutory collection to be deposited with the Government, and that including it would improperly enlarge the presumptive base. The Court therefore applied the established Tribunal view that GST should be excluded while computing income under section 44BB.

Conclusions: GST is not includible in gross receipts/specified amounts for section 44BB computation. The Assessing Officer was directed to exclude the quantified GST amount from gross receipts while computing income under section 44BB, and the assessee's ground on this issue was allowed.

Issue 2: Short grant of advance tax credit

Legal framework (as discussed by the Court): The Court addressed the limited relief of ensuring correct credit for advance tax actually paid, requiring factual verification by the Assessing Officer.

Interpretation and reasoning: The assessee asserted payment of a higher amount of advance tax than the credit allowed. The Court directed verification of the disputed portion of the deposit and mandated grant of credit if found in order.

Conclusions: The Assessing Officer was directed to verify the claimed balance advance tax deposit and, upon verification, allow corresponding credit. The ground was allowed for statistical purposes.

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