Tcs on sale of goods

Advocate V. P. Gupta has argued that sub-section (1H) of section 206C of the Income-tax Act, 1961, which comes into effect on 1st October 2020, will not serve any purpose but will instead raise a number of difficulties in implementation. The ld. author has requested the CBDT to either withdraw the statutory provision or to at least clarify the issues identified by him Vide Finance Bill, 2020 sub-section (1H) was proposed to be inserted in section 206C of the Income Tax Act providing for tax collection at source (TCS) w.e.f. 01.04.2020 by a Seller having turnover exceeding Rs. 10 Crores from a buyer on receipt of sale consideration exceeding Rs.50 lacs in any previous year. Rate of TCS was proposed @ 0.1% of sale consideration exceeding Rs.50 lacs. Proposed amendment was further modified to provide that section will not apply to transactions of goods to be exported out of India and to person importing the goods into India. It was also provided that section will come in force w.e.f. 01.10.2020. Sub-section (1H) as has been inserted in section 206C reads as under: (1H) Every person, being a seller, who receives any amount as consideration for sale of any goods of the value or aggregate of such value exceeding fifty lakh rupees in any previous year, other than the goods being exported out of India or goods covered in sub-section (1) or sub-section (1F) or sub-section (1G) shall, at the time of receipt of such amount, collect from the buyer, a sum equal to 0.1 per cent. of the ...

TCS on sale of goods above Rs. 50 Lakhs Tax Collected at Source (TCS): The mechanism of TCS has been prevailing under Income Tax Act for a long period of time. TCS is the tax which is collected by the seller from the buyer and then paid to the Income tax Department. The rates of TCS have been prescribed under Income Tax Act. For this purpose, Income Tax Act specifies the categories of goods or transactions which shall be liable for TCS. TCS on sale of goods under section 206C(1H) The Government of India in Finance Bill, 2020 introduced a new sub-section (1H) to Section 206C of the Income Tax Act, 1961which widened the scope of collection of TCS. Though, mechanism of collection of TCS on specified goods was already prevalent under Income Tax Act but this new sub-section has been introduced to cover all remaining goods under the ambit of TCS. The newly inserted TCS provision shall be effective from 1 st October, 2020. Applicability of TCS on sale of goods under section 206C(1H) • The provisions of TCS are applicable on seller of goods. TCS provisions are not applicable to service providers. • ‘Seller’ means a person whose total sales, gross receipts or turnover from the business exceeds Rs. 10 Crores during the previous year ended on 31 st March. • This means that every seller whose turnover in the previous financial year was more than Rs. 10 Crores are required to collect TCS under newly inserted sub-section. When TCS on sale of goods collected • TCS shall be collected by t...

• [ 01/04/2023 ] GST Compliance Calendar of April 2023 GST • [ 27/03/2023 ] GST sections amended in Finance Act 2023 GST • [ 25/03/2023 ] GST checklist with the onset of FY 2023-24 GST • [ 03/03/2023 ] Final Return after cancellation of GST registration GST • [ 18/02/2023 ] 49th GST Council Meeting GST Last updated on May 16th, 2021 at 05:52 pm TCS on Sale of Goods – Sec 206C(1H) The Finance Act, 2020 had introduced the new section 206C(1H) of the Income Tax Act, 1961 for Tax Collected at Source on sale of goods. The said provisions were made applicable from 1st October 2020. TCS u/s 206C(1H) What is TCS? Tax Collected at Source (TCS) are provisions under the Income Tax Act for collecting tax at source on certain transactions. TDS vs TCS Tax Deducted at Source Tax Collected at Source One is required to deduct the amount from payments made for certain transactions. One is required to collect additional amounts along with consideration for certain transactions. Eg. TDS @ 1% / 2% is deductible on contractual payments. Eg. TCS @ 1% is collectible on scrap sales. A has incurred a Jobwork Expense of Rs. 1.50 lacs. A need to deduct TDS of 2% and will make payment of only Rs. 1.47 lacs to the supplier. A has made scrap sale of Rs. 2,00,000/-. A need to collect Rs. 2,02,000/- from the purchaser of scrap. Such amount of TCS is considered as payment of Income Tax and deductible from total income tax liability of purchaser at the time of filing of return of income. (similar to TDS). A...

Introduction The complete form of TCS is Tax collected at Source. The Indian Government of India has decided to collect TCS from the customers for the purchase of a product or service basing on certain conditions.In simple words, TCS will be calculated on the proceeds of sale mentioned on the invoice and on the full invoice amount. This suggests that, TCS is calculated basing on the following aspects; • Total Invoice Amount • GST applicable on the Invoice Amount This can be better analyzed with the help of an illustration. For instance, the total invoice amount is Rs.1, 000 and 18% of GST will be applicable on the same. Thus, the total invoice amount will be Rs. 1, 180. The Sales Proceed will be collected from the customer. These days, the government is expecting the seller to collect TCS on the total Sales Proceeds i.e. Rs. 1,180. How to calculate TCS on scrap sale under GST? In business for some transactions, it is expected by the government that taxes must be withheld from the total payments and the same must be paid directly to the government.The examples of such transactions are E-commerce consumer sales and Scarp sales. The TCS calculation of scarp sale can be better analyzed with the help of an illustration. Generally, a taxpayer who does online sales on any E-commerce portal or sells a scrap or sell any other service, he or she has to be charged with TCS of 1% on such selling price.Now, the first thing that has be considered is to decide the selling price which is ...

Last updated on May 9th, 2021 at 10:20 pm TCS ON SALE OF GOODS – NEW PROVISION TCS (Tax Collected at Source) is a tax that is collected by the seller from the buyer and deposited to the account of the government on behalf of the buyer. As such, there are no TDS/ TCS provisions on the Sale of Goods other than the sale of special category goods like Alcohol, Tobacco, Tendu Leaves, Timber wood, Minerals, Motor vehicles of more than 10 Lakhs, etc. Thus, the government has introduced a provision where the seller has to collect TCS on the sale of any type of goods subject to some conditions. Background Difference between Section 194Q and Section 206C(1H) Now, let us look at the conditions and application of this provision. Applicability of TCS on Sale of Goods This provision has been made applicable from 1 st October 2020. TCS shall be applicable where the seller receives any amount as consideration of more than Rs. 50 Lakhs from a single buyer for the sale of ANY GOODS. Seller may be any person i.e. it can be Individual, Firm, AOP/BOI, Company, or any other form. When to Collect TCS The TCS has to be collected at the time of receipt of such amount i.e. TCS shall be collected on a Receipt Basis. TCS Rate and Ceiling Limit TCS shall be collected at the rate of 0.1% of the amount in excess of Rs. 50 Lakhs. If the buyer does not have PAN no. then the rate shall be 1 %. (Note: – TCS rate has been reduced to 0.075% for the period 1 st October 2020 to 31 st March 2021.) Non-Applicabil...

Summary TCS on sale of goods This document covers the functionality of the Tax collection at Source (TCS) on the sale of goods. This feature describes how to do the basic setup for TCS deduction on sale of goods transaction, calculate TCS on transactions from a customer or on a group of customer, TCS on the transaction when a customer does not have PAN number, etc. As per section 206C (1H) TCS should be collected at the time of receipt of payment from a customer against sales consideration. When the seller receives the payment TCS amount will be debited to the interim account and credited to the TCS payable account. On posting invoice, TCS amount will be posted to Interim payable account and added to invoice value Another important aspect of this feature is that if multiple customers have the same PAN number then the accumulated transaction amount will be taken to compare with the threshold limit to determine the eligibility of transaction for TCS deduction. The base amount for TCS deduction: The CBDT vide circular no. 17 Dated 30.09.2020, has clarified that since the collection is made regarding receipt of the amount of sale consideration, no adjustment on account of indirect taxes including GST is required to be made for the collection of tax under this provision. Thus, TCS is required to be collected on the sale consideration inclusive of GST. Under withholding tax group user has an option to include the GST Tax component and Charges to include in base amount for TCS ca...

There have been countless changes brought about in the Finance Act 2020, but the insertion of Section 206C (1H) to the Income Tax Act, 1961 is a welcome step to eliminate and monitor unaccounted money. As per the above relevant provision, a seller is required to collect Applicability of TCS on sale of goods If a person, as a seller having turnover in the previous financial year exceeding ₹ 10 crores, receives any sum of money as a consideration against the sale of any goods having value individually or in aggregate over and above Rs. 50 lakh in a previous year, other than the exported goods or goods covered under sub-section (1), (1F) or (1G) of Section 206C of Income Tax Act 1961 shall, while receiving such amount, collect a sum from the buyer equal to 0.1 % of the consideration in excess to Rs. 50 lakh as TCS. It is further to be noted that tax shall be collected on “all” goods except those exclusively prescribed under sub-section (1), (1F) & (1G) of Section 206C of Income Tax Act 1961 or any goods exported. Further, where the buyer does not provide his PAN/AADHAR Number to the seller, the tax shall be collected @ 1% on the sale consideration. In essence: Particulars Rate of TCS PAN or Aadhaar number provided by the buyer 0.10% PAN or Aadhaar number not provided by the buyer 1% Following is the list of goods covered under other sub-sections for collection of tax at source: Section Items covered under TCS 206C (1) a. Alcoholic Liquor for human consumption b.Tendu leaves c...

In this article Business Central has included Tax Collected at Source (TCS) Section 206C(1H) Feature in Indian Localization. A new TCS section 206C (1H) has been introduced in finance bill 2020. As per new section, a seller has to collect TCS from buyer on any sales of Goods, where aggregate value of sales exceeds INR 50,00,000 (Threshold Amount) within same financial year. TCS to be collected on amount that is over & above INR 50,00,000, for example: Threshold amount is INR 50,00,000, TCS to be collected on amount that is more than INR 50,00,000. TCS % varies for PAN and Non-PAN customers. A Seller whose turnover is more than INR 10,00,00,000 Crore in previous financial year is eligible to collect TCS under section 206C(1H). Setting up TCS Section 206C(1H) Following is the list of setups that will be required • • To set up TCS nature of collection TCS Nature of Collection represents the various types of payments received for which TCS rates have been specified under the provisions of section 206C(1H) of the Income Tax Act 1961. A new field 'TCS On Recpt Of Pmt.' has been added on the setup. • Choose the icon, enter TCS Nature of Collection, and then choose the related link. • Fill in the fields as described in the following table. Field Description TCS On Recpt Of Pmt. User will not be able to select TCS Nature of Collection on sales invoice and credit memo lines where 'TCS on Recpt. Of Pmt.' is TRUE. To set up TCS rates Rate of TCS is defined in combination of TCS nature...