TCS CHARGED IN TNEB Bills in Tamil Nadu -

[venkataraman swaminathan]

Dear Sir

Good Morning

We received Electricity Bill from TNEB ( Tamil Nadu Electricity Board ) .

We are HT service user for Factory operations. When we verified the TNEB Bill

TNEB charged TCS amount & there is no workings in that bill. (TCS ₹ 453/--)

Total EB Bill ₹ 3.09 lacs

In this connection , is it mandatory / requirement to charge TCS By TNEB

& there is no sale etc.. They are charging EB charges and Meter rent charges & Wheeling charges. ( for Rent they are charging GST as service head)

Request guidance on this .

Thanks

V swaminathan

[Rajagopalan Ranganathan]

Sir,

Collection of tax at source (TCS) under Section 52 of CGST Act, 2017 is in respect of electronic commerce operator. TNEB is not electronic commerce operator. Hence Section 52 is not applicable to them.

Tax deduction at source is, as per Section 51 (1) of CGST Act, 2017, in respect of

(a) a department or establishment of the Central Government or State Government; or

(b) local authority; or

(c) Governmental agencies; or

(d) such persons or category of persons as may be notified by the Government on the recommendations of the Council,

(hereafter in this section referred to as “the deductor”), to deduct tax at the rate of one per cent. from the payment made or credited to the supplier (hereafter in this section referred to as “the deductee”) of taxable goods or services or both, where the total value of such supply, under a contract, exceeds two lakh and fifty thousand rupees:

In your case you are not supplying anyh goods/services to TNEB. If you do so then when macking payment to you TNEB has to deduct tax at source at the prescribed rate.

Moreover according to sl. No. 25 of Notification No. 12/2017-C.T (Rate) dated 28.06.2017 as amended transmission or distribution of electricity by an electricity transmission or distribution utility is chargeable to tax At 'Nil' rate.

Therefore you are advised to take up the matter with TNEB.

[venkataraman swaminathan]

DearSir

Thank You very much for the feedback.

But TNEB indicating the Section 206(C) for TCS recovery in TNEB Bill.

request your further more guidance please.

thanks

v.swaminathan

[Rajagopalan Ranganathan]

Sir,

I feel it is under Income Tax Act. Please consult your Income tax auditor

[Rakesh Bansal]

Sir,

The Income Tax Act vide section 206C(1H) has provided wef from 01.10.2020 for collection of tax at source @ 0.1% of the amount received from the customer where consideration received in one year above Rupees ₹ 50 Lakhs. For specific details consult the section.

CA Rakesh Bansal

[Ganeshan Kalyani]

Sir, TCS is applicable on sale of goods. It is not applicable on service rendered. The term 'EB charges', 'meter rent charges' etc. indicates that it is service. So, in my view TCS is not applicable.

Expert view is solicitated.

[Rakesh Bansal]

Sir,

in my opinion it is applicable on electricity bill. Because the electrical energy (electricity) is termed as good and not service. However on additional services there may or not be TCS with only logic of its being composite supply or not.

regards

CA Rakesh Bansal

[Vishesh Goyal]

Hi,

You should visit cleartax.in

AI Summary

Debate Over TNEB's TCS Charges: Does Section 206C(1H) of Income Tax Act Apply to Electricity Bills? A user raised a query about the Tamil Nadu Electricity Board (TNEB) charging a Tax Collected at Source (TCS) amount on their electricity bill without detailed workings. The bill totaled 3.09 lakhs with a TCS of 453. One response clarified that TNEB, not being an electronic commerce operator, should not apply TCS under Section 52 of the CGST Act, 2017. Another response mentioned Section 206C(1H) of the Income Tax Act, which allows TCS on amounts exceeding 50 lakhs annually. Opinions varied on whether TCS applies to electricity, considered a good, or services like meter rent. Further consultation with a tax auditor was advised.