![]() ![]() As such, TCS shall be collected on Total Sale Value received less ₹ 50 lakh. Section 206C(1H) envisages that TCS at the rate of 0.10% of the sale consideration received in excess of ₹ 50 Lakhs shall be collected by the seller. 3 Whether TCS to be collected on total sales value to the buyer to whom sales in excess of ₹ 50 Lakhs has been made or only to the amount in excess of ₹ 50 Lakhs?Īns. Clarification provided by CBDT on 29 th September 2020 states that “it is hereby clarified that no adjustment on account of sale return or discount or indirect taxes including GST is required to be made for collection of tax under sub section (1H) of section 206C of the Act since the collection is made with reference to receipt of amount of sale consideration.” Thus, the intent is to have the TCS on sales consideration collected including GST. 2 Whether sales consideration includes GST component?Īns. In the statement issued by ICAI on the CARO the word ‘turnover’ has been defined as under- “The term ‘turnover’ for the purposes of this clause may be interpreted to mean the aggregate amount for which sales are effected or services rendered by an enterprises”. In the “Guidance Note on Terms used in Financial Statements” published by ICAI, “the expression “Sales Turnover” has been defined as: “The aggregate amount for which sales are affected or services rendered by an enterprise. The term turnover has not been specifically defined in the sub-section. Here, Seller means a person whose Total Sales, Turnover, Gross Receipts from the business being carried out by him in preceding Financial Year exceeds ₹ 10 Crores. ![]() Q.1 What is the meaning of Seller under the provisions of section 206C(1H)?Īns. This document also contains detailed FAQs that will seek to dispel any doubts that one may have regarding the stated provisions. In this document, we have compiled a list of compliances and obligations on the part of seller as well as a detailed checklist of actions that needs to be performed by the seller before the provisions are made effective. Ĭonsidering the doubts being raised by trade & industry in relation to interpretation and compliance of the newly introduced provisions, Central Board of Direct Taxes has come up with a slew of clarifications by way of Circular 17/2020 dated 29 th September 2020 and press release dated 30 th September 2020. TCS to be collected if the Value/Aggregate Valuereceived for Goods from a buyer is more than ₹ 50 Lakhs in a financial year.Turnover of seller is more than ₹ 10 Crores in preceding financial year.A Seller of Goods is liable to collect TCS from Buyer on Sale of any goods.The provisions of sub-section (1H) of section 206C has been made effective from 1 st October 2020 and state that: ![]() Though collection of TCS on sale of certain goods was already covered under different sub-sections of Section 206C, however all the remaining goods, which were not so covered under other provisions of section 206C, have now been brought under the ambit of TCS by inserting sub-section (1H) in Section 206C. Section 206C of the Income Tax Act, 1961 specifies the categories of goods on which seller has to collect tax from the purchasers.Īs you are already aware, sub-section (1H) has been inserted in Section 206C by Finance Act, 2020 for collection of TCS by the seller on sale of any goods. The rate of TCS is different for goods specified under different categories. Tax Collected at Source (TCS)is the tax payable by a seller which he collects from the buyer. Updated FAQs on TCS on sale of Goods U/s 206C (1H) ![]()
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