Tax Collection at Source (TCS) onon sale of certain minerals

Mining sector is an important segment of Indian economy but the trading of minerals remained largely unregulated resulting in non-reporting or under-reporting of trading in minerals trading transactions for the taxation purpose. In order to collect tax at the earliest point of time and also to improve reporting mechanism of transactions in mining sector, it is proposed that tax at the rate of 1% shall be collected by the seller from the buyer of the following minerals:

(a)  Coal;

(b)  Lignite; and

(c)  Iron ore.

However, the seller shall also not collect tax on sale of the said minerals if the same are purchased by the buyer for personal consumption. Further, the seller of these minerals shall not collect tax if the buyer declares that these minerals are to be utilized

for the purposes of manufacturing, processing or producing articles or things.

This amendment will take effect from 1st  July, 2012.

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27 Comments

  1. Deeksha Sachdev says:

    What is the limit for deduction of TCS?
    if I made a sale for Rs. 2,000/- it is applicable or not
    And if I made a sale Above Rs. 1,00,000, will it be applicable??

  2. VINOD KUMAR says:

    Sir,

    i m working in a coal company and i want full knowledge about tcs on coal sale to bhatta company and manufacturers for tcs return purpose

  3. S Rajesh says:

    Should TCS on sale of coal by High Seas Sales to be coolected. Should TCS be included in the High Seas Sales Invoice or be ccolected by separate debit note

    kindly clarify

  4. SK MATHPAL says:

    SIR,

    IS THIS TCS IS APPLICABLE ON HIGH SEAS SALE ? AND HOW CAN WE CHARGED like saparate debit note or show/include in the High Seas sale invoice.

    KINDLY LET ME KNOW THE LINK FROM WHERE I CAN GET THE CIRCULAR OF THE SALE.

    REGARDS,
    SK MATHPAL

  5. Dharmendra Rawani says:

    This TCS on coal is one time or has to be collected at every subsequent trade? what if the subsequent buyer from a trader doesn’t have a PAN no. and fails to furnish form 27c. How will the return be uploaded without the details of buyer???

  6. Ashok Chadha says:

    Dear Sir,
    One of my client named Rahul is dealing in coal at Moradabad. He make the purchases from a dealer in
    Ayodhya. He applied for the reduction of TCS. But the Income Tax Officer advised him that the TCS is not applicable in his case. But refused to give some thing in writing.
    However he referred the matter to his Brother in law, who is a Chartered Accountant at Delhi.
    His reply is being quoted by me as under:
    “Dear Rahul,

    Pl see the circular in the link below. Hope it can resolve your query. As I gather from your write up yours is a second sale from the party from whom you are purchasing and therefore no TCS applies in your case.

    law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2009ITAct/sec_206c.htm

    AJ”

    The circular referred above is being enclosed by me in a separate file with this letter.
    I would like to have your considered opinion in the matter

    Ashok Chadha
    Guwahati
    09864070755

  7. A K says:

    Sir

    Came to know that TCS is chargable on 1st point sale only then why we will charge the same to our custoimer afterpurchasing the same from Coal India Limited as we are coal trader

  8. kumar jai says:

    Sir Please reply as same thing asked from you previously .
    coal purchase from coal india ltd.(gov.under taking) by e-auction & deposit 1% TCS on coal value as a trader & sale it in open market to any customers (they have no any confirmation of purchase like PAN OR 27C) by cash. in this position trader what to do. or trader is not liable to collect TCS from his buyers . thanking you kumar jai

  9. s.n.singh says:

    coal purchase from coal india ltd.(gov.under taking) by e-auction & deposit 1% TCS on coal value as a trader & sale it in open market to any customers (they have no any confirmation of purchase like PAN OR 27C) by cash. in this position trader what to do. or trader is not liable to collect TCS from his buyers

  10. rajeev singh says:

    please clarify on sec 206c, its total provisions and exemption if any for traders. what a trader is supposed to do in regard to retrade or further sale. does he require to collect tcs from its buyer or not. please clarify. as the buyers are not fixed and certain what are we supposed to do according to this act.

  11. nikhil says:

    This TCS on coal is one time or has to be collected at every subsequent trade?   what if the subsequent buyer from a trader doesn’t have a PAN no. and fails to furnish form 27c. How will the return be uploaded without the details of buyer???

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