1. Applicability of the TDS provisions @ 0.1%
(i) It’s applicable from 1st July 2021 against the purchases of goods from Indian resident seller.
(ii) It’s applicable where purchaser is purchasing of goods from Indian resident seller for minimum of Rs. 50 Lakhs during the Financial year (FY) ending on March 31, 2022 and also purchaser turnover is minimum Rs. 10 crore during the FY ending on March 31, 2021.
2. ‘Non-Applicability’ of the TDS provisions @ 0.1%
(i) It’s not applicable on the following transactions:-
(a) Transactions for securities and commodities as being traded through recognized stock exchange or being cleared and settled through recognized clearing corporation including those are located in International Financial Service Centre (IFSC)
(b) Transactions in electricity, renewable energy certificates and energy saving certificates as being traded through registered power exchanges.
(iii) (a) It’s not applicable where purchaser is purchasing of goods from Indian Resident seller and has already credited and paid (both) Rs.50 lakh or more up to 30th June 2021. Hence these TDS provisions are not applicable up to 30th June 2021 beside that purchase are exceeding Rs. 50 Lakhs
(b) However these TDS provisions are applicable for the purchases from 1st July 2021 even for Rs. 1 where purchases are already exceeded Rs. 50 Lakhs up to 30th June 2021.
(iii) (a) It’s not applicable for the purchase of goods from non-resident seller.
(b) However these provisions are applicable for the purchase of goods from non-resident seller where non-resident seller has taxable Permanent Establishment (PE) in India.
(iv) (a) It’s not applicable for the purchase of goods from a seller whose income is Fully (100%) exempted under section 10 or 11 of the Income Tax Act, 1961.
(b) However these provisions are applicable for the purchase of goods from a seller whose income is partly (not 100%) exempted under section 10 or 11 of the Income Tax Act, 1961.
(v) It’s not applicable for the purchase of goods where purchaser has not incorporated his entity/ company during the FY ending on 31st March 2021.
(vi) (a) It’s not applicable for the purchase of goods, gross receipts or turnover where same is although exceeding 10 crore during the FY ending on 31st March 2021 but same is not from 100% ‘business activities’.
(b) It’s applicable for the purchases of goods, gross receipts or turnover where same is exceeding 10 crore during the FY ending on 31st March 2021 from100% business activities.
(vii) (a) It’s not applicable for the purchase of goods through E-commerce platform like Amazon or Flipkart where TDS @ 1% has already been deducted under section 194-O.
(b) Hence TDS provisions are not applicable under section 194Q @ 0.1% where TDS has already been deducted under section 194–O @ 1%.
(viii) It’s not applicable for the purchase of services. Hence it’s applicable for the purchase of goods
3. Important Clarifications
(i) Amount of GST is to be excluded for applicability of TDS provisions where TDS is being deducted at the time of credit
(ii) Amount of GST if any is to be included for applicability of TDS provisions Where TDS is being deducted at the time of making advance payments and also amount of GST is not known at the time of making advance payments.
(iii) (a) Amount of GST is not to be adjusted against purchase returns. However TDS is to be adjusted against next purchase from the same seller.
(b) Amount of GST is not to be adjusted against purchase return where it replaced by the goods.
Disclaimer : The contents of this presentation are solely for in Formational purpose. Neither this presentation nor the in Formation contained herein constitutes a contract or will Form the basis of a contract. The material contained in this presentation does not constitute/substitute professional advice that may be required before acting on any matter. While every care has been taken in the preparation of this presentation to ensure its accuracy at the time of publication, Satish Agarwal assumes no responsibility for any errors which despite all precautions, may be found herein. In no event shall we be liable for direct or indirect or consequential damages, if any, arising out of or in any way connected with the use of this presentation or the in Formation contained herein.
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Author Bio
Sir
Do TDS required to deducted on Purchase of SCRAP where TCS is collected by seller from buyer.
Thanks in Advance