TCS on Sale of Goods Section 206C(1H) from 01.10.2020

 

TCS on sales of Goods

Section 206C(1H) of Income Tax Act 1961

Applicable with effect from 01.10.2020

SN	Question	Answer
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.
2	From whom to be collected	TCS would be collected from buyer to whom sale exceeding Rs. 50 lakhs is made in a year
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).
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
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
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.
7	TCS Provision not applicable	This provision is not applicable in the case of export of goods and sales made to the Government.
8	Treatment of Sales return, credit Note or Debit Note while collecting TCS under section 206C(1H)	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.
8	Date of Deposit	within 7 days from the end of month.
9	TCS E-Return Date	Quarter Due Date April to June 15th July July to September 15th October October to December 15th January January to March 15th May
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