Big Clarifications by government on TCS on sale of goods w.e.f 1st Oct 2020

Analysis of New Section 206C(1H) 

1. The Government of India has introduced a new Section 206C(1H) with regards to Tax Collection at Source‘. Applicable to everyone having turnover of Rs. 10 crores in last financial year.

2. Every seller who has received any amount as sale consideration above Rs. 50 lakhs from buyer has to collect additional 0.10% [Relaxed rate for FY 2020-21 – 0.075%] of bill amount, collect PAN and pay as TCS every month.

TCS on sale of goods

 Key Points

1. TCS to be levied on Sales that is in excess of Rs 50 Lakhs post 01-10-2020.

2. TCS Shall be collected at the time of receipt of sales consideration, hence liable to be collected in the month in which amount is received. Further TCS collected during a month needs to be deposited within 7 days of next month.

3. Same like TDS, return of TCS will be filed quarterly, & TCS certificates shall be issued to buyer.

4. TCS can be collected by charging through invoice or by charging through debit note separately.

Now, government has issued following big clarifications on issues that needs kind attention of government to be resolved before rolling over the provisions.

1) For determining limit of Rs 10 crore, turnover of FY 19-20 will be considered.
2) For determining threshold of Rs 50 lakhs, turnover from Apr 20 – Sep 20 will also be considered, though liability of TCS will arise only if receipt is after 1st Oct 2020.
3) TCS shall be applicable on amount of money received. So TCS will be calculated on total receipt amount including GST.
4) Cases where sale occurs before 1st Oct 2020, but receipt is after 1st Oct 2020, TCS will be applicable on amount of receipt post dated 1st Oct 2020.
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3 Comments

  1. Pradeep Kumar Pathak says:

    In this article it has been mentioned that TCS will be charged on Basic value +GST. PLEASE CLARIFY WHETHER TCS WILL BE CHARGED ON BASIC VALUE OR TOTAL VALUE i.e VALUE+GST.

  2. PALANIVELRAJAN says:

    hi sir.., i need some clarification about GST TCS, we have selling oxygen and nitrogen to supply railway and central govt hospital,and state govt units,subsidiary govt sector and co-operative societies.. so which one for eligible for collect TCS and which thus exempted…. kindly give some list of govt sectors..

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