TCS @1% ON ROUNDING OFF AMOUNT

[PRUTHVI NARAYAN]

Hello sir/madam

1. We are buying IML from KSBCL, Karnataka and Retail sellers in Karnataka.

KSBCL is rounding off (AROED per unit) while fixing MRP. But KSBCL is not charging 1% TCS on AROED amount and the AROED amount is showing separately in the invoice.

Now, our question is whether the invoice raised by them excluding TCS on AROED amount is correct or not. Will it affect us at a later stage?

regards

PRUTHVI NARAYAN

AI Summary

TCS on total consideration: excluding rounding off charges may cause under collection and affect buyer's tax credit.
AROED, though shown separately to adjust MRP, forms part of the consideration received and therefore should be included in the computation of TCS. Excluding AROED from the TCS base risks under collection by the seller and may reduce the TCS credit reflected for the buyer, potentially prompting future queries; buyers should obtain written clarification from the seller to avoid disputes.