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

Tax Collected at Source debate: applicability on electricity bills split between GST TDS rules and Income Tax TCS provisions.
TNEB recovered an amount labelled as tax collected at source on an electricity bill. Section 52 GST for e-commerce operators is inapplicable; Section 51 GST TDS applies only where a specified government or notified deductor deducts tax on payments to suppliers. Transmission or distribution of electricity by a distribution utility is nil-rated under GST, limiting GST-based TCS/TDS. The Income Tax Section 206C(1H) TCS on receipts for sale of goods was cited as an alternative basis. The critical legal question is whether billed components are sale of goods or supply of services and which statutory regime correctly authorises the recovery; taxpayers are advised to contest with the utility and consult an income-tax auditor.