PANAJI
Confusion writ large among auto dealers in the State as the one per cent Tax Collected at Source (TCS) on sale of cars costing more than Rs 10 lakh comes into force from June 1. This tax was announced by Union Finance Minister, Arun Jaitley during his budget this year.
However, the modalities of the new tax still remain vague. Prashant Joshi, president, Goa Automobile Dealers Association, said, "At the moment, there is no proper clarity as to how this tax will be collected from the customer and transferred to the government. This may result in confusion for around one to two weeks from the date of implementation".Apparently, the Centre's intention behind this is to bring more people within the tax net. The auto dealers will charge 1 per cent TCS, give a certificate to the buyer and deposit the tax to the government. When the buyer files an income-tax return, the 1 per cent TCS will be credited to him.
In India, only a tiny percentage of people file income tax returns resulting in government losing a lot of tax revenue. Now, car-buyers will be forced to file returns if they want the 1 per cent TCS back.
Joshi continued, "We learnt that dealers will have to give a certificate to the buyers. But, we don’t know, as of now, what should be the content of the certificate. Even, dealers buy cars from car makers. We don’t know whether we, as dealers, also have to pay TCS or not".
But, as of now, it seems clarity on this issue is tough to come by. Cedric Rodrigues, general manager, Muktar Automobiles, a dealer of Mahindra, said, "We haven't got any formal communication from regional transport offices (RTOs) on how to go about the new tax. We will need training on how to implement it as well”.
The TCS will be applicable on the ex-showroom price of the cars. Another dealer said, “While quoting on-road price to a buyer, we tell him the entire price break-up, including all sorts of taxes. We expect a lot of questions from buyers the moment they see this 1 per cent TCS”.
It seems that dealers will find it difficult to deal with all those questions because they themselves lack clarity on this issue.
Meanwhile, 1 per cent TCS will be applicable even when an individual is selling his used car at more than Rs 10 lakh. This tax will also be applicable on purchase of spare parts costing over Rs 2 lakh. Besides, this tax will also be applicable to trucks, buses and two-wheelers.
