Presentation on TCS under section 206C (1H )
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The document provides an overview of the Tax Collection at Source (TCS) under Section 206C(1H), detailing the seller's requirements for tax collection, conditions under which it applies, and the scenarios that exempt it. Tax collection is mandated for sellers with an annual turnover exceeding Rs. 10 crore when the sale consideration from a buyer exceeds Rs. 50 lakh in a financial year. The document also outlines the applicable tax rates, exceptions, and clarifications regarding GST and other considerations.
Presentation on TCS under section 206C (1H )
- 1. TCS under section 206C(1H) An overviewAn overview by Dr. Vinod K. Singhania
- 2. Who is liable to collect tax at sourceWho is liable to collect tax at source “Seller” is required to collect tax at Seller is required to collect tax at source. ©Vinod K. Singhania
- 3. Who is liable to collect tax at sourceWho is liable to collect tax at source “Seller” is required to collect tax at Seller is required to collect tax at source. Who is seller 1. Turnover - His turnover in the immediately Individual, HUF, firm company copreceding financial year is more than Rs. 10 crore. 2. Negative list - Central Government or any Turnover - Domestic sale - Sale in overseas market firm, company, co- operative society artificial juridical person, AOP, BOP,Government or any person notified by the Government. - Of goods and services person, AOP, BOP, ©Vinod K. Singhania
- 4. From whom tax is to be collectedFrom whom tax is to be collected Tax is required to be collected from buyerTax is required to be collected from buyer of goods. ©Vinod K. Singhania
- 5. From whom tax is to be collectedFrom whom tax is to be collected Tax is required to be collected from buyerTax is required to be collected from buyer of goods. A person who purchases goods from seller Negative list – - (a) Central Government, State Government, an embassy, a High Commission, legation, commission, consulate and the trade representation of a foreign State, or - (b) local authority, or - (c) a person importing goods into India, or ©Vinod K. Singhania p p g g - (d) any other person as notified by the Central Government.
- 6. From whom tax is to be collectedFrom whom tax is to be collected Tax is required to be collected from buyerTax is required to be collected from buyer of goods. Immovable property is not “goods”. b Any movable property, commodity, shares/securities, agriculture produce, fuel, electricity, liquor, jewellery/bullion, peace of art/drawings, scraps, forest produce. But if tax is deducted/collected under any other provision by buyer or seller, section 206C(1H) TCS is not applicable. ©Vinod K. Singhania y y , ( ) pp
- 7. Time of tax collection at source Tax is to be collected by seller at the timeTax is to be collected by seller at the time of receipt of sale consideration exceeding Rs 50 lakh (in a financial year) from aRs. 50 lakh (in a financial year) from a buyer. ©Vinod K. Singhania
- 8. Time of tax collection at source Tax is to be collected by seller at the timeTax is to be collected by seller at the time of receipt of sale consideration exceeding Rs 50 lakh (in a financial year) from aRs. 50 lakh (in a financial year) from a buyer. B t t ll ti i i d l iBut tax collection is required only in respect of sale consideration received on ft O t b 1 2020 ( TCS tor after October 1, 2020 (no TCS up to September 30, 2020). ©Vinod K. Singhania
- 9. Time of tax collection at source Tax is to be collected by seller at the time Different cases Seller Buyer Sale consideration received by seller from buyer of goods during the financial year 2020-21 Whether TCS is required under Tax is to be collected by seller at the time of receipt of sale consideration exceeding Rs 50 lakh (in a financial year) from a cases of goods during the financial year 2020 21 required under section 206C(1H) Up to September 30, 2020 From October 1, 2020 Total Case 1 A Ltd. X Rs. 10 lakh Rs. 30 lakh Rs. 40 lakh No TCS Rs. 50 lakh (in a financial year) from a buyer. B t t ll ti i i d l i Case 2 B Ltd. Y Ltd. Rs. 40 lakh Rs. 20 lakh Rs. 60 lakh TCS on Rs. 10 lakh Case 3 C Ltd. Z Ltd. Rs. 60 lakh Rs. 20 lakh Rs. 80 lakh TCS on Rs. 20 But tax collection is required only in respect of sale consideration received on ft O t b 1 2020 ( TCS t Case 3 C Ltd. Z Ltd. Rs. 60 lakh Rs. 20 lakh Rs. 80 lakh TCS on Rs. 20 lakh Case 4 D Ltd. A LLP Nil Rs. 80 lakh Rs. 80 lakh TCS on Rs. 30 lakh or after October 1, 2020 (no TCS up to September 30, 2020). TCS required only if turnover of seller for financial year i ©Vinod K. Singhania 2019-20 is more than Rs. 10 crore
- 10. Rate of TCS Rate of TCS is 0 1% (0 075% duringRate of TCS is 0.1% (0.075% during October 1, 2020 and March 31, 2021). I PAN it i 1% (i PANIn no PAN case, it is 1% (in no PAN case, no concession during October 1, 2020 and M h 31 2021)March 31, 2021). ©Vinod K. Singhania
- 11. When TCS is not requiredq Sale consideration received before October 1, 2020., If sale consideration (or agreed sale consideration) received from a seller does not exceed Rs. 50 lakh. If turnover of the seller in the preceding financial year is Rs. 10 crore or less. If ll d If seller exports goods. Sale consideration pertaining to supply of services. If b i li bl t TDS d i i d If buyer is liable to TDS under any provision and tax is deducted by buyer. If goods are covered by TCS provisions of section ©Vinod K. Singhania If goods are covered by TCS provisions of section 206C(1)/(1F)/(1G).
- 12. Lower/nil TCS certificate Not possible. ©Vinod K. Singhania
- 13. A few clarifications Circular No. 17/2020, dated September 20, 2020. GST is part of sale consideration. Advance receipt of sale consideration is subject to TCS. Advance received before October 1, 2020 but sale of goods on or after October 2020. S l f d b f O b 1 2020 b Sale of goods before October 1, 2020 but consideration received on or after October 1, 2020. ©Vinod K. Singhania
- 14. A few clarifications Circular No. 17/2020, dated September 20, 2020. No adjustment on account of sale return or di i di i l di GST idiscount or indirect taxes including GST is required to be made for TCS section 206C(1H) since the collection is made with reference tosince the collection is made with reference to receipt of amount of sale consideration. ©Vinod K. Singhania
- 15. Case StudyCase Study Seller : X Ltd., buyer : A Ltd. Invoice No. Invoice Invoice Invoice No. Seller : X Ltd., buyer : A Ltd. (Invoices issued by X Ltd. to A Ltd. during financial year 2020-21) 15 No. 36 No. 105 584 Rs. Rs. Rs. Rs. MRP 38,20,000 30,90,000 70,00,000 1,30,00,000 L Di / h di /Less: Discount/cash discount/ trade discount as per invoice 20,000 3,09,000 70,000 13,00,000 Balance 38,00,000 27,81,000 69,30,000 1,17,00,000 Add: GST 2 28 000 5 00 580 8 31 600 21 06 000Add: GST 2,28,000 5,00,580 8,31,600 21,06,000 Total 40,28,000 32,81,580 77,61,600 1,38,06,000 ©Vinod K. Singhania
- 16. Date Details A Ltd. Dr Cr Total Rs. Rs. Rs. April 1, 2020 Opening balance 39,06,000 – 39,06,000 July 2, 2020 Goods sold/Invoice No. 15 August 16, 2020 Goods sold/Invoice No. 36 August 17, 2020 Defective goods return pertaining to Invoice No 15 (GST Credit Note to beInvoice No. 15 (GST Credit Note to be issued) September 18, 2020 NEFT of Rs. 5 lakh by A Ltd. October 6, 2020 Goods sold/Invoice No. 105 October 8, 2020 NEFT of Rs. 80 lakh by A Ltd. November 7, 2020 TCS deposited November 12, 2020 NEFT of Rs. 60 lakh by A Ltd. December 7, 2020 TCS deposited December 28, 2020 Goods sold/ Invoice No. 584 February 12, 2021 NEFT of Rs. 95 lakh by A Ltd.eb u y , 0 N o s. 95 by d. March 7, 2021 TCS deposited March 31, 2021 Balance c/d April 1, 2021 Balance b/d ©Vinod K. Singhania p , April 15, 2021 NEFT of Rs. 70 lakh (for part payment of outstanding amount + advance of Rs. 40 lakh) May 7, 2021 TCS deposited
- 17. A few clarifications Date Details A Ltd. Dr Cr Total Rs. Rs. Rs. April 1, 2020 Opening balance 39,06,000 – 39,06,000 July 2, 2020 Goods sold/Invoice No. 15 40,28,000 August 16, 2020 Goods sold/Invoice No. 36 32,81,580 August 17, 2020 Defective goods return pertaining to Invoice No 15 (GST Credit Note to beInvoice No. 15 (GST Credit Note to be issued) – September 18, 2020 NEFT of Rs. 5 lakh by A Ltd. – October 6, 2020 Goods sold/Invoice No. 105 77,61,600, , October 8, 2020 NEFT of Rs. 80 lakh by A Ltd. – November 7, 2020 TCS deposited – November 12, 2020 NEFT of Rs. 60 lakh by A Ltd. – December 7, 2020 TCS deposited – December 28, 2020 Goods sold/ Invoice No. 584 1,38,06,000 February 12, 2021 NEFT of Rs. 95 lakh by A Ltd.y , y – March 7, 2021 TCS deposited – March 31, 2021 Balance c/d – April 1, 2021 Balance b/d – ©Vinod K. Singhania p – April 15, 2021 NEFT of Rs. 70 lakh (for part payment of outstanding amount + advance of Rs. 40 lakh) – May 7, 2021 TCS deposited –
- 18. A few clarifications Date Details A Ltd. Dr Cr Total Rs. Rs. Rs. April 1, 2020 Opening balance 39,06,000 – 39,06,000 July 2, 2020 Goods sold/Invoice No. 15 40,28,000 – 79,34,000 August 16, 2020 Goods sold/Invoice No. 36 32,81,580 – 1,12,15,580 August 17, 2020 Defective goods return pertaining to Invoice No 15 (GST Credit Note to beInvoice No. 15 (GST Credit Note to be issued) – 14,10,000 98,05,580 September 18, 2020 NEFT of Rs. 5 lakh by A Ltd. – October 6, 2020 Goods sold/Invoice No. 105 77,61,600, , October 8, 2020 NEFT of Rs. 80 lakh by A Ltd. – November 7, 2020 TCS deposited – November 12, 2020 NEFT of Rs. 60 lakh by A Ltd. – December 7, 2020 TCS deposited – December 28, 2020 Goods sold/ Invoice No. 584 1,38,06,000 February 12, 2021 NEFT of Rs. 95 lakh by A Ltd.y , y – March 7, 2021 TCS deposited – March 31, 2021 Balance c/d – April 1, 2021 Balance b/d – ©Vinod K. Singhania p – April 15, 2021 NEFT of Rs. 70 lakh (for part payment of outstanding amount + advance of Rs. 40 lakh) – May 7, 2021 TCS deposited –
- 19. A few clarifications Date Details A Ltd. Dr Cr Total Rs. Rs. Rs. April 1, 2020 Opening balance 39,06,000 – 39,06,000 July 2, 2020 Goods sold/Invoice No. 15 40,28,000 – 79,34,000 August 16, 2020 Goods sold/Invoice No. 36 32,81,580 – 1,12,15,580 August 17, 2020 Defective goods return pertaining to Invoice No 15 (GST Credit Note to beInvoice No. 15 (GST Credit Note to be issued) – 14,10,000 98,05,580 September 18, 2020 NEFT of Rs. 5 lakh by A Ltd. – October 6, 2020 Goods sold/Invoice No. 105 77,61,600 5,00,000 93,05,580 – 1,70,67,180, , October 8, 2020 NEFT of Rs. 80 lakh by A Ltd. – November 7, 2020 TCS deposited – November 12, 2020 NEFT of Rs. 60 lakh by A Ltd. 79,97,377 90,69,803 – December 7, 2020 TCS deposited – December 28, 2020 Goods sold/ Invoice No. 584 1,38,06,000 February 12, 2021 NEFT of Rs. 95 lakh by A Ltd. Receipt of sale considerationy , y – March 7, 2021 TCS deposited – March 31, 2021 Balance c/d – April 1, 2021 Balance b/d – consideration 35 lakh × 100 100 + t 45 lakh + ©Vinod K. Singhania p – April 15, 2021 NEFT of Rs. 70 lakh (for part payment of outstanding amount + advance of Rs. 40 lakh) – May 7, 2021 TCS deposited – t = 0.075
- 20. A few clarifications Date Details A Ltd. Dr Cr Total Rs. Rs. Rs. April 1, 2020 Opening balance 39,06,000 – 39,06,000 TCS Rs. July 2, 2020 Goods sold/Invoice No. 15 40,28,000 – 79,34,000 August 16, 2020 Goods sold/Invoice No. 36 32,81,580 – 1,12,15,580 August 17, 2020 Defective goods return pertaining to Invoice No 15 (GST Credit Note to beInvoice No. 15 (GST Credit Note to be issued) – 14,10,000 98,05,580 September 18, 2020 NEFT of Rs. 5 lakh by A Ltd. – October 6, 2020 Goods sold/Invoice No. 105 77,61,600 5,00,000 93,05,580 – 1,70,67,180, , October 8, 2020 NEFT of Rs. 80 lakh by A Ltd. – November 7, 2020 TCS deposited – November 12, 2020 NEFT of Rs. 60 lakh by A Ltd. 79,97,377 90,69,803 2,623 (Cr) 2,623 (Dr) – December 7, 2020 TCS deposited – December 28, 2020 Goods sold/ Invoice No. 584 1,38,06,000 February 12, 2021 NEFT of Rs. 95 lakh by A Ltd.y , y – March 7, 2021 TCS deposited – March 31, 2021 Balance c/d – April 1, 2021 Balance b/d – ©Vinod K. Singhania p – April 15, 2021 NEFT of Rs. 70 lakh (for part payment of outstanding amount + advance of Rs. 40 lakh) – May 7, 2021 TCS deposited –
- 21. A few clarifications Date Details A Ltd. Dr Cr Total Rs. Rs. Rs. April 1, 2020 Opening balance 39,06,000 – 39,06,000 TCS Rs. July 2, 2020 Goods sold/Invoice No. 15 40,28,000 – 79,34,000 August 16, 2020 Goods sold/Invoice No. 36 32,81,580 – 1,12,15,580 August 17, 2020 Defective goods return pertaining to Invoice No 15 (GST Credit Note to beInvoice No. 15 (GST Credit Note to be issued) – 14,10,000 98,05,580 September 18, 2020 NEFT of Rs. 5 lakh by A Ltd. – October 6, 2020 Goods sold/Invoice No. 105 77,61,600 5,00,000 93,05,580 – 1,70,67,180, , October 8, 2020 NEFT of Rs. 80 lakh by A Ltd. – November 7, 2020 TCS deposited – November 12, 2020 NEFT of Rs. 60 lakh by A Ltd. 79,97,377 90,69,803 2,623 (Cr) 2,623 (Dr) 59,95,503 30,74,300 4,497 (Cr)– December 7, 2020 TCS deposited – December 28, 2020 Goods sold/ Invoice No. 584 1,38,06,000 February 12, 2021 NEFT of Rs. 95 lakh by A Ltd. Receipt of sale 9,9 , ,7 , , ( ) 4,497 (Dr) y , y – March 7, 2021 TCS deposited – March 31, 2021 Balance c/d – April 1, 2021 Balance b/d – p f consideration 60 lakh × 100 100 + t ©Vinod K. Singhania p – April 15, 2021 NEFT of Rs. 70 lakh (for part payment of outstanding amount + advance of Rs. 40 lakh) – May 7, 2021 TCS deposited – 100 t t = 0.075
- 22. A few clarifications Date Details A Ltd. Dr Cr Total Rs. Rs. Rs. April 1, 2020 Opening balance 39,06,000 – 39,06,000 TCS Rs. July 2, 2020 Goods sold/Invoice No. 15 40,28,000 – 79,34,000 August 16, 2020 Goods sold/Invoice No. 36 32,81,580 – 1,12,15,580 August 17, 2020 Defective goods return pertaining to Invoice No 15 (GST Credit Note to be Receipt of sale Invoice No. 15 (GST Credit Note to be issued) – 14,10,000 98,05,580 September 18, 2020 NEFT of Rs. 5 lakh by A Ltd. – October 6, 2020 Goods sold/Invoice No. 105 77,61,600 5,00,000 93,05,580 – 1,70,67,180 p consideration 95 lakh × 100 100 + t, , October 8, 2020 NEFT of Rs. 80 lakh by A Ltd. – November 7, 2020 TCS deposited – November 12, 2020 NEFT of Rs. 60 lakh by A Ltd. 79,97,377 90,69,803 2,623 (Cr) 2,623 (Dr) 59,95,503 4,497 (Cr)30,74,300 100 + t t = 0.075 – December 7, 2020 TCS deposited – December 28, 2020 Goods sold/ Invoice No. 584 1,38,06,000 February 12, 2021 NEFT of Rs. 95 lakh by A Ltd. 9,9 , 1,68,80,300 , ( ) 4,497 (Dr) ,74, 94 92 880 73 87 419 7 120 (Cr)y , y – March 7, 2021 TCS deposited – March 31, 2021 Balance c/d – April 1, 2021 Balance b/d – 94,92,880 73,87,419 7,120 (Cr) 7,120 (Dr) 73,87,419 73,87,419 ©Vinod K. Singhania p – April 15, 2021 NEFT of Rs. 70 lakh (for part payment of outstanding amount + advance of Rs. 40 lakh) – May 7, 2021 TCS deposited –
- 23. A few clarifications Date Details A Ltd. Dr Cr Total Rs. Rs. Rs. April 1, 2020 Opening balance 39,06,000 – 39,06,000 TCS Rs. July 2, 2020 Goods sold/Invoice No. 15 40,28,000 – 79,34,000 August 16, 2020 Goods sold/Invoice No. 36 32,81,580 – 1,12,15,580 August 17, 2020 Defective goods return pertaining to Invoice No 15 (GST Credit Note to beInvoice No. 15 (GST Credit Note to be issued) – 14,10,000 98,05,580 September 18, 2020 NEFT of Rs. 5 lakh by A Ltd. – October 6, 2020 Goods sold/Invoice No. 105 77,61,600 5,00,000 93,05,580 – 1,70,67,180 Receipt of sale consideration, , October 8, 2020 NEFT of Rs. 80 lakh by A Ltd. – November 7, 2020 TCS deposited – November 12, 2020 NEFT of Rs. 60 lakh by A Ltd. 79,97,377 90,69,803 2,623 (Cr) 2,623 (Dr) 59,95,503 4,497 (Cr)30,74,300 60 lakh × 100 100 + t 50 lakh + t = 0 1– December 7, 2020 TCS deposited – December 28, 2020 Goods sold/ Invoice No. 584 1,38,06,000 February 12, 2021 NEFT of Rs. 95 lakh by A Ltd. 9,9 , 1,68,80,300 , ( ) 4,497 (Dr) ,74, 94 92 880 73 87 419 7 120 (Cr) t = 0.1 y , y – March 7, 2021 TCS deposited – March 31, 2021 Balance c/d – April 1, 2021 Balance b/d – 94,92,880 73,87,419 7,120 (Cr) 7,120 (Dr) 73,87,419 73,87,419 ©Vinod K. Singhania p – April 15, 2021 NEFT of Rs. 70 lakh (for part payment of outstanding amount + advance of Rs. 40 lakh) – May 7, 2021 TCS deposited – 1,09,94,006 36,06,587 (Cr) 5,994 (Cr) 5,994 (Dr)
- 24. A few clarifications Sale of cars by a manufacturer to a dealerSale of cars by a manufacturer to a dealer Different Seller Buyer Sale consideration of motor vehicles during Whether Whether TCS cases the financial year 2020-21 (value of each car exceeds Rs. 10 lakh) TCS is required under section ( ) is required under section 206C(1H)Up to September 30, From October 1, 2020 Total 206C(1F) p 2020 Case 1 X Ltd. P Ltd. Rs. 90 lakh – Rs. 90 lakh Not applicable Not applicable Case 2 Y Ltd. Q Ltd. Rs. 230 lakh Rs. 700 lakh Rs. 930 lakh Not applicable Applicable on Rs. 700 lakh Case 3 Z Ltd. R Ltd. Rs. 1800 lakh Rs. 40 lakh Rs. 1840 lakh Not applicable Applicable on Rs. 40 lakh ©Vinod K. Singhania
- 25. A few clarifications Sale of cars by a dealer to a consumer Different cases Seller Buyer Sale consideration of motor vehicles during the financial year 2020-21 Whether TCS is required under Whether TCS is required under Sale of cars by a dealer to a consumer section 206C(1F) section 206C(1H) Up to September 30, 2020 From October 1, 2020 Total Case 1 A Ltd. S Ltd. (two cars are Rs. 9 lakh Rs. 80 lakh Rs. 89 lakh TCS applicable on Not applicablecars are purchased) lakh applicable on Rs. 80 lakh applicable Case 2 B Ltd. T (two cars are purchased) Rs. 80 lakh Rs. 9 lakh Rs. 89 lakh TCS applicable on Rs 80 lakh TCS applicable on Rs 9 lakhRs. 80 lakh Rs. 9 lakh Case 3 C Ltd. U Ltd. (five cars are purchased) Car 1 : Rs. 9 lakh Car 2 : Rs. 15 lakh Car 3 : Rs. 8 lakh Car 4 : Rs. 12 lakh Car 5 : Rs. 50 Rs. 94 lakh TCS applicable on Car 2, Car 4 and Car 5 Not applicable 15 lakh Car 5 : Rs. 50 lakh and Car 5 Case 4 D Ltd. V Ltd. (five cars are purchased) Car 1 : Rs. 69 lakh Car 2 : Rs. 8 Car 3 : Rs. 7 lakh Car 4 : Rs. 6 lakh Car 5 : Rs. 11 Rs. 101 lakh TCS applicable on Car 1 and TCS applicable on Rs. 13 lakh ©Vinod K. Singhania lakh lakh Car 5 (i.e., Car 3 and Car 4)
- 26. A few clarifications F l li d t id t i liFuel supplied to non-resident airlines Th i i f ti 206C(1H) h ll The provision of section 206C(1H) shall not apply on the sale consideration i d f f l li d t id treceived for fuel supplied to non-resident airlines at airports in India. ©Vinod K. Singhania
- 27. A few clarifications T ti i d t th h i E hTransactions carried out through various Exchanges N TCS T ti i iti / diti No TCS - Transactions in securities/ commodities traded through recognized stock exchanges or cleared and settled by the recognized clearingcleared and settled by the recognized clearing corporation (including entities located in IFSC). No TCS - Transactions in electricity, renewableNo TCS Transactions in electricity, renewable energy certificates and energy saving certificates traded through power exchanges ©Vinod K. Singhania