♦ Introduction to Section:
-Section 206C of the Income Tax Act provides for the collection of Tax at Source (TCS).
–TCS is collect on specified goods like Alcoholic Liquor for human consumption, tendu leaves, scrap etc.
-In order to widen and deepen the tax, a two new sub-section (1H) is inserted with effect from 1.10.2020.
♦ Who has to collect TCS:
- Under section 206C(1H) seller is liable to collect tax at source from buyer.
- “Seller” for this purpose means whose turnover exceeds Rs 10 crore during the financial year immediately preceding the financial year in which the sale of sale of goods is carried out.
- “Buyer” means a person who purchase any goods (i.e. any other goods not covered by other provisions of section 206C) from seller and value or aggregate value of goods during previous year exceeds Rs 50 lakh.
♦ When to collect TCS:
- Seller receives any amount as consideration for sale of any goods of the value exceeding Rs 50 lakh from any single buyer.
- TCS has to be collected at the time of received of such amount i.e. on RECEIPT BASIS.
- Sale made to buyers upto 30th September, 2020 shall not be liable to collect the TCS.
♦ Non Applicability of the section:
- Where the turnover of the seller is less than 10crore in the preceding Financial Year.
- Where goods are exported out of India.
- Where any TDS provision is applicable to such goods.
- Where the buyer is the Central Government, State Government, Embassy, A high Commission, Legation or trade representation of foreign state.
- Where the buyer is a local authority as per explanation to section 10(20).
- Where the seller is dealing with the following goods:
| Particulars | Section of TCS |
| -Alcoholic Liquor for human consumption
-Tendu Leaves -Timber obtained under forest lease -Timber obtained by any mode other than under a forest lease -Any other forest produce not being timber or tendu leaves -Scrap -Minrals, being coal or lignite or iron ore |
Section 206C(1) |
| Motor Vehicle (if the value exceeds 10laks) | Section 206C(1F) |
| -Sum of money (above 7 lakhs) for remittance out of India
-Seller of an overseas tour program package |
Section 206C(1G) |
♦ Rate of TCS:
- TCS shall be collected @0.1% of the amount in excess of Rs 50 lakh.
- If buyer does not provide the PAN , TCS shall be deducted @1%.
- NOTE: (TCS rate has been reduced to 0.075% from 1st October, 2020 to 31st March 2021).
♦ Due date to deposit TCS:
- The TCS collected by the seller shall be paid to the account of the Government by the 7th of the next month.
♦ Illustrations:
Sr No. |
Seller |
FY 2019-20 |
FY 2020-21 |
Buyer |
Sell till 30th Sept |
Sell From 1st Oct |
TCS u/s 206C(1H) |
Remarks |
1 |
A |
11cr |
8cr |
B |
23,00,000 |
68,00,000 |
4100 |
0.075% on 41 lakh (Being excess of Rs 50 lakh) |
2 |
A |
8.5cr |
12cr |
B |
23,00,000 |
68,00,000 |
NA |
As turnover in the FY 2019-20 not exceeding Rs 10 crore. |
3 |
A |
13cr |
16cr |
B |
76,00,000 |
7,00,000 |
700 |
On Rs 7 lakh being turnover after 30th September |
4 |
A |
11cr |
8cr |
Central Government |
53,00,000 |
25,00,000 |
NA |
Since section 206C (1H) is not applicable if buyer is Central Govt. |
5 |
A(Job worker) |
14cr |
12cr |
B (is liable to deduct TDS u/s 194C) |
35,00,000 |
55,00,000 |
NA |
Since TDS is already deducted on this transaction. |
6 |
A (Auto Dealer) |
20cr |
15cr |
B (Buying a Car) |
0 |
25,00,000 |
NA |
As on this transactions TCS shall be collect u/s 206C(1F) |
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Sir, TCS on sale of goods..so what about buyer..which head TCS account open ?
YES TCS IS APPICABLE ON SALES OF GOODS U/S 206C(1H). READ THIS SECTION
Previous Turnover less than 10 crores and in current year sale made to a part for 60 lakhs.Whether TCS is applicable
TCS amount how deducted on invoice. Base Value or Net Value
Is tcs to be applied on jnvoice? Or tcs to be tracked from debtors collection? Is tcs to be calculated on 50 lacs sales with gst or basic value?
Sir for collection of TCS shuld we include GST also as on receipt we will receive GST portion as well
Dear Sir,
Please clear me that we can dedcut tcs to our customer who is not resale our yarn but he is manufacturing fabric from our yarn.Our turn over Rs.30 crore in f.y 2019-20 and we have business our customer above Rs.50 Lakh in 2019-20
We Have Deemed Export sales (i.e Sale to EOU unit against form A). As per my understanding, there is no need to deduct TCS u/s 206C(1H) am i right or wrong.
Sir, how is it possible to collect TCS when the payment is received. I think that the section 206 C (1H) should be altered in such a way that when the sale value exceeds 50 lakhs to a buyer, TCS is to be collected from the buyer by adding it in the invoice itself. Kindly give your opinion.
Sir, how is it possible to collect TCS when the payment is received? I think that the section 206 C (1H) should be altered in such a way that when the sale value exceeds 50 lakhs to a buyer, TCS is to be collected. Please reply.
SIR,
DO U THINK IS BURDEN OF ACCOUNTANT.
Dear Sir, Illustration 1 & 3 is totally confusing. 1st the sales value before Oct is considered for TCS calculation, but in the 3rd illustration sales value before Oct is not considered. Please clarify.
Is TCS Applicable on sales of Import Goods as well as Bond Transfer for Customs Bonded Wearhouse.