TaxTMI 
TaxTMI 
TCS @1% ON ROUNDING OFF AMOUNT
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....CS @1% ON ROUNDING OFF AMOUNT<br> Query (Issue) Started By: - PRUTHVI NARAYAN Dated:- 9-1-2025 Last Reply Date:- 8-5-2025 Income Tax<br>Got 1 Reply<br>Income Tax<br>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 sep....
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....arately 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 Reply By Ramanathan Seshan: The Reply: Dear sir, Thank you for your detailed query regarding TCS on AROED (Additional Retailer Overhead and Expenses Discount) in invoices raised by KSBCL. Summary of the I....
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....ssue: * KSBCL is rounding off the price using AROED to arrive at MRP. * The AROED amount is shown separately on the invoice. * KSBCL is not charging 1% TCS on the AROED amount. * Your concern: Is this correct, and could it affect you later? Analysis: 1. Applicability of TCS (Section 206C(1H) of Income Tax Act): * TCS is applicable on sale of goods if the seller's turnover exceeds Rs.10....
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.... crores in the previous FY and the value of sale to a buyer exceeds Rs.50 lakhs in a FY. * TCS is levied on the "consideration received" - which typically includes all components of sale value. 2. What is AROED? * AROED is an additional charge added by KSBCL to round off the price per unit and arrive at the MRP. * Even if shown separately in the invoice, it still forms part of the total con....
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....sideration paid by you. 3. Is TCS on AROED legally required? * If AROED is part of the price paid to KSBCL, and not a reimbursable charge or third-party fee, it should be included in the TCS calculation. * By excluding TCS on AROED, KSBCL might be undervaluing the consideration, leading to under-collection of TCS. 4. Will it affect you (the buyer)? * You, as a buyer, are not liable to coll....
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....ect TCS, so no direct tax liability falls on you. * However, if you claim TCS credit, and the seller (KSBCL) has under-reported the TCS, the TCS reflected in your Form 26AS may be lower than expected. * This could affect your TCS credit claim during your income tax filing or invite a query from the Income Tax Department. Conclusion: * Technically, TCS should be calculated on the total consi....
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....deration, which includes AROED. * KSBCL's practice of not charging TCS on AROED is likely not correct, unless AROED is treated as an independent, non-taxable charge (which seems unlikely in your case). * You should document and clarify this position with KSBCL in writing to avoid future disputes. * This might affect your TCS credit claim later unless KSBCL adjusts its TCS reporting to in....
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....clude AROED in the consideration. Regards, S Ram<br> Discussion Forum - Knowledge Sharing ....