SIAM clarifies on tax collection at source

The finance ministry has informed the Society of Indian Automobile Manufacturers (SIAM) that a manufacturer will not be required to take one percent tax collection at source (TCS) from dealers. But the latter will still have to collect the tax from customers.

According to a SIAM spokesperson, the Central Board for Direct Taxes (CBDT) has confirmed that manufacturers don't need to collect TCS from dealerships.

The Finance Bill 2016 had stated: "Every person, being a seller, who receives any amount as consideration for sale of a motor vehicle of the value exceeding Rs 10 lakh, shall, at the time of receipt of such amount, collect from the buyer, a sum equal to 1% of the sale consideration as income-tax.”.

According to SIAM, a consumer buying a car costing more than Rs 10 lakh will have to pay the tax. But if the consumer sells a car for over Rs 10 lakh, he/she will not have to collect any TCS.

Source : BS Motoring