TCS on sales of Goods
Section 206C(1H) of Income Tax Act 1961
Applicable with effect from 01.10.2020
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SN |
Question |
Answer |
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1 |
Applicability |
To all sellers of goods whose Turnover
during FY 2019-20 or FY 2020-21 shall be greater than Rs. 10 crore or
expected to be greater than Rs 10 crores respectively. (No Clarification by
CBDT regarding Gross turnover but looking to the Section 44AB Tax Audit Limit
where Indirect Taxes are added in the runover hence fore this Section
turnover would be including of GST.
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2 |
From whom to be collected |
TCS would be collected from
buyer to whom sale exceeding Rs. 50 lakhs is made in a year
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3 |
On which Amount TCS to be
collected and paid |
TCS shall be applicable only on
amount of sale exceeding Rs. 50 lakhs in a year. That means if a person has
sold goods worth Rs. 60 Lakhs to one buyer, then TCS needs to be collected
only on Rupees 10 Lakhs
TCS will be collected on (Gross value – discount + GST)
i.e. on total invoice value (clarification as per Circular No. 17/2020 dated 29.09.2020).
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4 |
Rate of TCS |
0.075% From
01.10.2020 to 31.03.2021
0.10% From
31.03.2021 onwards
1.00% If
buyer does not have PAN
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5. |
Time of collection of TCS |
TCS is to be collected at the
time of actual receipt of consideration by the seller.
Example Total Sale Made till Sept 2020 Rs.75 Lakhs Amt collect till Sept 2020 Rs.60 Lakhs
Sales Made Aft Oct 2020 Rs.50 Lakhs
Amt received aft Oct 2020 Rs.65 Lakh TCS is payable on whole amount of Rs.65
Lakhs |
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6 |
In Case TDS is deducted |
TCS under this section shall
not be applicable where TDS is being deducted on same transaction or TCS is
collected. I.e. in case of service TCS under this section is not applicable.
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7 |
TCS Provision not applicable |
This provision is not
applicable in the case of export of goods and sales made to the Government.
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8 |
Treatment
of Sales return, credit Note or Debit Note while collecting TCS under section
206C(1H)
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Liability of collection of TCS
arises on the date of receipt of the sales consideration from the buyer.
Therefore, if sales return is made or credit note is raised before collection
of sales consideration and thereafter, sales consideration is received net of
Credit Note then TCS shall be collected on net amount. However, if sales return is
made or credit note is issued after collection of sales consideration then
TCS shall be charged on gross amount without deducting credit note or sales
return.
In case of debit note, excess
payment is received over and above the decided sales consideration.
Therefore, the amount collected pursuant to debit note shall be liable to TCS
on date of receipt. |
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8 |
Date of Deposit |
within 7 days from the end of
month.
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9 |
TCS E-Return Date |
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10 |
Penal Provision |
Interest to be paid @ 1.50% Per
Month
Late Fees for ETCS return
Rs.200 Per Day if not filed with the time limit |
