The Finance Act, 2020 has made an amendment by insertion of sub-section (1H) in section 206C of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) which is effective from 01.10.2020. As a result of the said amendment, a seller who receives any amount as consideration for the sale of any goods of the value or aggregate of such value exceeding Rs. 50 Lakh in any previous year shall at the time of receipt of such amount collect from the buyer, a sum equal to 0.10% of the sale consideration exceeding fifty lakhs as income tax.
The above provisions are applicable for all seller whose turnover during the last financial year was more than Rs.10 Cr.
In this respect it is advised as under :
1. Start collecting TCS on every receipt of sale consideration from 01-10-2020 in those cases where the sale consideration received upto 30-9-2020 has already crossed 50 lacs.
2. Ensure that PAN is available in all the above case of dealers. 3. The rate of TCS applicable upto 31st March is 0.075% . From 1st April,2021 it is 0.1%. 4. The TCS collected for the particular month is to be deposited by 7th of next month. 5. Necessary collection can be done at the time of receipt of consideration or through dr. note issued at the end of the month. (considering total receipts for the month) 6. Quarterly return of TCS is to be filed within 15 days from the end of the quarter. The bare provision of Section 206C(1H) levying TCS on sale of goods reads as follows- (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 sale consideration exceeding fifty lakh rupees as income-tax: Provided that if the buyer has not provided the Permanent Account Number or the Aadhaar number to the seller, then the provisions of clause (ii) of sub-section (1) of section 206CC shall be read as if for the words "five per cent", the words "one per cent" had been substituted: Provided further that the provisions of this sub-section shall not apply, if the buyer is liable to deduct tax at source under any other provision of this Act on the goods purchased by him from the seller and has deducted such amount. Explanation.—For the purposes of this sub-section,— (a) "buyer" means a person who purchases any goods, but does not include,— (A) the Central Government, a State Government, an embassy, a High Commission, legation, commission, consulate and the trade representation of a foreign State; or (B) a local authority as defined in the Explanation to clause (20) of section 10; or (C) a person importing goods into India or any other person as the Central Government may, by notification in the Official Gazette, specify for this purpose, subject to such conditions as may be specified therein; (b) "seller" means a person whose total sales, gross receipts or turnover from the business carried on by him exceed ten crore rupees during the financial year immediately preceding the financial year in which the sale of goods is carried out, not being a person as the Central Government may, by notification in the Official Gazette, specify for this purpose, subject to such conditions as may be specified therein. These amendments have taken effect from 1st October, 2020.
