With a view to widen the tax-net the India Government has widened the scope of TCS (Tax Collected at Source) provided under section 206C of the Income Tax Act, 1961. As per the extended scope, tax is need to be collected on foreign remittances under Liberalized Remittance Scheme (LRS) , sale of overseas tour packages and on sale of goods by specified seller (after exceeding a specified limit). Such all the scopes are applicable from 01.10.2020.
The Finance Act, 2020 has introduced the new section 206C(1H) of the Income Tax Act, 1961 for Tax Collected at Source on sale of goods. The said provisions are applicable from 01.10.2020.In this article I will discuss a brief preview of the scope of TCS on Sale of goods by specified seller.
TCS- Meaning
Sec- 206(1H) –Applicable from 01.10.2020 – Applicable to whom –
Features
1) Applicable on sale of all goods except the export of goods and goods already covered under other provisions of TCS. i.e.
2) TCS provisions are applicable if the value or aggregate value of sales consideration > Rs.50 Lacs during the year.
3) TCS is applicable to the amount received in excess of Rs. 50 lacs.
4) TCS provisions are applicable at the time of receipt of consideration.
Examples-
Suppose, M/s XYZ Ltd. has turnover of Rs 20 crores in FY 2019-20 and has made sale of goods to Mr A of Rs 70 Lakhs in FY 2020-21 and receives Rs 56 lakhs as payment on 31.03.2021.
M/s XYZ Ltd needs to collect TCS on Rs 6 lakhs i.e. Rs (56-50) lakhs* 0.1%. Rs 600 needs to be collected as TCS, issue certificate to the buyer and file statement of such tax collected.
(But as TCS reduced till 31.03.2021 by 25%, in this case tax needs to be collected is Rs. 450 (i.e. (56-50) lakhs * 0.075%)
Continuing with the above example, if the balance of Rs 14 lakhs (Rs 70-56 lakhs) is received during the next financial year, say 10.04.2021-
M/s XYZ Ltd needs to collect TCS on Rs 14 lakhs at 0.1%. i.e. Rs 1400 needs to be collected as TCS, issue certificate to the buyer and file statement of such tax collected.
Rate of TCS
Exclusion of Buyers
Section 206(1H) is not applicable to the following buyers:
TCS Payment and Return
Quarter | Quarterly Return- Due Date | TCS Certificate |
Apr-June | 15 July | 30 July |
July- Sep | 15 Oct | 30 October |
Oct- Dec | 15 January | 30 January |
Jan- Mar | 15 May | 30 May |
Notes:
TCS threshold limit of 50 Lakh apply to every upcoming year? (Ie. My turnover cross in FY.1920, So it applied in 20-21, is it applied in 21-22 also?)
Dear Madam,
If goods are sold to MSEDCL in Maharashtra from listed entitiy whose annual turnover is more than 10cr. Is TCS will be applicable pls put your comment.
Is there any exemption of tcs on sale of imported coal
Is TCS applicable on transportation expenses under Transportation of services by road
Dear ma’am,
If i have sale goods in September and received amount in October, shall i collect tcs on it? If yes, then how?
hi mam,
206c(1H) this provision applicable for manufacturer & traders only ?? or any other goods sale for normal persons for the above 10 core turnover is previous f.y ??
How we have to collect TCS ? In good sale invoice or by credit/debit note?
In press release dt.13 May, 2020(Point 4) stated that there shall be no reduction in rates of TDS or TCS, where tax is required to deduct or collect at higher rate due to non-furnishing of PAN/Aadhaar.
What is the TCS rate in the above case 0.75 or 1%?
Madam
Is it TCS applicable in Sale of Flats, Villas Etc ?
Madam, we have sale of bricks scrap to customers and raised GST bill. We didn’t deduct any tcs and 4cr s our last year turnover. And we we traders.
Now, 1.can we deduct tcs?
2.Tcs attract manufacturing or trading ?
Dear mam,
We are tyre manufacturer and seller. Will TCS applicable on our tyre sale @1% from 01.10.2020.
On scrap we are collecting TCS now.
Plz guide.