ITC Eligibility on GST Charged Over TCS – Clarification Needed

[Ramanathan Seshan]

Dear Experts,

Weve procured manufacturing scrap from Company A, and noticed that GST has been charged on the TCS amount as well as per section 15(2) of CGST Act

For example:

• Scrap value: ?100
• TCS: ?1
• Taxable value considered: ?101
• GST @18%: ?18.18

In this case, can we claim ITC on the full GST amount, including the portion calculated on the TCS?

Regards,

S Ram

AI Summary

Input tax credit eligibility on GST charged over tax collected at source faces statutory and circular conflict.
Whether ITC is available on GST charged on TCS is contested: Section 15(2) of the CGST Act suggests inclusion of taxes charged separately in the taxable value, implying TCS may be included; CBIC Circular No. 76/50/2018-GST (and corrigendum referenced) treats TCS as an interim levy not constituting tax or part of consideration and thus not includible. Operational practice varies and ITC entitlement ultimately depends on whether GST was actually charged and remitted and on compliance with general ITC conditions.