- Nidhi Surana Jain
- | Income Tax - Articles
- 11 Apr 2020
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- 30 comments
TCS Scope Widening
Eligibility
- Sale of any goods above Rs. 50 lakhs; and
- Turnover of Rs. 10 Crores and above during FY 2019-20 and onwards
Effective from
1 October 2020
Exceptions
- If the buyer is liable to deduct TDS or collect TCS under any other provision of the Act and has deducted/collected such amount on the goods purchased by him from the seller; or
- If the buyer is the Central/State Govt, an embassy, a High Commission, legation, consulate, the trade representation of foreign state, local authority; or
- Any Person importing goods to India or any class of person notified by the Central Govt in the official gazette for the purpose subject to such condition as specified in that notification
Detailed Description
Every seller, whose total sales, gross receipts or turnover from the business carried on by him exceed ₹ 10 Crores during the FY 2019-20 & onwards, who receives any amount as consideration for sale of any goods (excluding exports) of the value or aggregate of such value exceeding ₹ 50 Lakhs in any previous year shall at the time of receipt of such amount collect a sum equal to 0.1% of the sale consideration exceeding ₹ 50 Lakhs as Tax Collected at Source (TCS) from the buyer. If the buyer has not provided the Permanent Account Number or the Aadhaar number to the seller, then the applicable rate of TCS will be 1 PERCENT.
All the other compliances like payment, filing of form/return, and issuing of certificate remains the same. In case of Non-compliance, there still exist the assessee in default provision.
Key Takeaways
The said provision is applicable to all transactions including i.e. Inter-company sales transaction exceeding Rs. 50 Lakhs in the FY 2020-21. But seller will be liable to collect TCS w.e.f. 1st October, 2020. The assessee needs to check the applicability on year on year as well as specific to each buyer basis on PAN India not GSTIN Basis
There has been no corresponding amendment into the provision of TCS for making an application for collection of tax at such lower rate than the relevant rate specified in section. The only section covered by the for making an application for collection of tax at such lower rate than the relevant rate specified in sub-section pertains to scrap sales, Alcoholic Liquor for human consumption, Tendu leaves, license for parking lot, toll plaza, Mining & quarrying etc.
The exemption from collecting tax is given only to those buyers who are liable to deduct tax at source under any other provision of this Act and has deducted such amount. The buyer will get the tax-credit of tax collected at source by the seller
The goods mentioned below are not required to consider for the above said provision since the rate for collecting tax for such goods has been specifically mentioned:
- Alcoholic Liquor for human consumption
- Tenduleaves
- Timber obtained under a forest lease
- Timber obtained by any mode other than under a forest lease
- Any other forest produce not being timber or tendu leaves
- Scrap, Minerals, being coal or lignite or iron ore
- Motor vehicle
- Foreign remittance through Liberalised Remittance Scheme
- Selling of overseas tour package
Illustration
Context
Mr. A is the seller and Mr. B is the buyer. They conduct business on regular basis. Mr. A gross receipts or turnover from the business carried on by him exceeds ten crore rupees during FY 2019-20.
Transaction 1: Sold and Received prior to 1 Oct 2020 
No TCS will be collected by seller as the said provision is applicable from 1st October, 2020
Transaction 2: Sold and Received after 1 Oct 2020
- Aggregate value of total sales of Mr. A to Mr. B is ₹1.35 Crores (70 lakhs + 65 lakhs), exceeding the ₹50 lakhs in the FY 2020-21
- Mr. A will be liable to collect TCS on ₹60 lakhs @ 0.1% when Mr. A receives the sales consideration i.e. on 25 October 2020
- If Mr. B does not provide his Permanent Account Number or Aadhaar number to the seller, then the applicable rate of TCS will be collected @ 1% of ₹60 lakhs
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Last year Our Turnover was Below 5 cr
but this year from april 2020 till date if my sale to one party cross above 50 Lakh are we liable to collect TCS From that party.
what is the section number for payment tcs on sale considering above 50 lakhs
our suppliers turnover is above 500 crores. his first transaction with us is of 30 lakhs only but he says due to his turnover he has to collect tcs from 1st bill is it true
We have purchased Raw material from supplier for Rs. 66,75,003.00 on 05.10.2020 the break up as given below
Taxable Value Rs. 58,00,000.00
IGST @ 18% Rs. 8,70,000.00
——————–
Rs.66,70,000.00
TCS @ 0.075% 5,002.00
———————–
Invoice Value Rs.66,75,003.00
————————
Book of Entry
Purchase A/c Rs. 58,00,000.00
Taxes & Duties
(Input IGST) Rs. 8,70,000.00
Now what entry I will book for TCS Rs. 5,002.00
Please Suggest
Entry for your transaction :
Purchase a/c………Dr 58,00,000
ITC (igst) a/c………Dr 8,70,000
TCS Receivable….Dr 5,002
To, Party a/c 66,75,002
Will TCS be applicable on sale of FOCUS LISENCE
Is it applicable on milk
dear sir
if receipt (against sales) before 1st oct 20 is 70 lakh , after 1st oct receipt (against sales) is 80 lakh , so on which amount tcs is collectable ??
If my sale is below Rs.10 crores in the previous year
then am I liable to collect TCS from my customers even after sales limit of Rs.50 lacs ?
No
materials GL AC- DR
IGST ACCOUNT – DR
TCS RECOVERABLE AC- DR
PARTY ACCOUNT – CR
What about TCS on consignment sales
FM Request , To provide This Facility ( Deposit of Tax on Receipt of Payment ) In GST
Question 1) If the goods are sold before October 2020 but the consideration is received in December 2020 – TCS will be deducted ?
Question 2) Goods are sold in the month of Feb. 2021 and the payment received on May 2021, TCS will be deducted in which F.Y. ?
what TCS charge actual 0.1% or 0.075% sir reply me
with PAN its 0.075% or without its 1
Thank you very much.
1) SALE AMOUNT : – Rs. 60 Lacs
CONSIDERATION RECD. : – Rs 40 Lacs
TSC DEDUCTABLE?
2) ADVANCE RECD. : – Rs. 60 Lacs
SALE DURING THE YEAR : – 40 Lacs
TSC DEDUCTABLE?
3) SALE : – Rs 60 Lacs
AMT RECD BEFORE OCTOBER : – Rs 40 Lacs
AMT RECD AFTER OCTOBER : – Rs 20 Lacs
AMT OF TCS @0.1% ON 20L OR 60L ?
4) SALE : – Rs. 75 Lacs
AMT RECD IN CURRENT YEAR : – Rs 45 Lacs
AMT RECD IN NEXT YEAR : – Rs 30 Lacs
TSC DEDUCTABLE?
5) CURRENT YEAR SALE : – Rs 30 Lacs
PREVIOUS YEAR B/F BALANCE : – 30 Lacs
AMT RECD 30 Lacs FOR PREVIOUS YEAR
AMT RECD 30 Lacs FOR CURRENT YEAR
TSC DEDUCTABLE?
Emulate
Respected Madam,
can mention/ provide the source for applicability date as 01/10/2020 and not 01/04/2020.
Thank you in advance.
Dear Sir,
As per IT the sales TCS applicable 01/10/2020 what above before 01/10/2020 supplies???
In section 206C of income tax in which the turnover for to collecting tcs was rs 10 crore is rs 10 crore inclusive of gst and other taxes or exclusive from some taxes
And rs 50 lakhs from party is also inclusive of gst and other taxes or exclusive from some taxes.
i want to ask that our firm is partnership firm and we deducted tcs all scrap bill our turnover is 4 crores somethings so pls tell me is this right to go deducted tcs ?
I want to ask one question TCS will be applicable on paper or paper items from 01.10.2020 where sales is more than 50 Lacs
according to act, it is mentioned that more than 50 lakh rs. we have to deducted TCS, as per the above example consideration is received 60 lakh out of which 50 lakh is limit, so on balance 10 lakh TCS is required to be deducted
DEAR SIR,
LAST DATE OF FILING GSTR3B OF TURNOVER ABOVE 5 CRORE.
& WHAT ABOUT BELOW 1.5 CRORE.
DUE DATE AS PER GOVT.
NO INTEREST, PENALTY & LATE FINE MUST BE CHARGED SO THAT.
I am highly indebted for the Tax related updates. I am a passionate learner.
Question 1) If the goods are sold before October 2020 but the consideration is received after October 2020. So whether TCS will be have to deducted ?
Question 2) For eg If the Goods are sold in the month of March 2021 and the payment is received in the next year, what will be the procedure ?
Question 1) If the goods are sold before October 2020 but the consideration is received after October 2020. So whether TCS will be have to deducted ?
I want to ask one question that our firm is prop firm and he deals in construction business, accepting contract of Bses and mes. so whether it is covered in this section or exempt from this section