Skip to main content

TCS UNDER SECTION 206C(1H) OF INCOME TAX ACT EFFECTIVE FROM 01.10.2020

By

 

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 sale of any goods of the value or aggregate of such value exceeding fifty lakh rupees in any previous year shall at the time of receipt of such amount collect from the buyer, a sum equal to 0.1 percent of the sale consideration exceeding fifty lakhs as income tax.

This provision is applicable only on those businesses whose turnover of Last F.Y. is more than Rs. 10Crs

If the buyer has not provided PAN or Aadhar, then TCS rate will be 1%.

Note : For F.Y. 2020-21 rate of TCS is 0.075%.

This provision is not applicable if the buyer is:

Ø     Central Government, state government, an embassy, a high commission, legation, commission, consulate and the trade representation of foreign state.

Ø      A local authority

Ø     A person importing goods into India

Ø     Who have deducted TDS under any other provision

We can understand this TCS provision with the help of an example: 

 Sale Value of goods

 GST @ 18%

Gross Invoice Value

Cumulative Gross

Invoice Value

 TCS threshold of INR 50 Lac

 TCS Value

10,00,000

1,80,000

11,80,000

11,80,000

-

-

25,00,000

4,50,000

29,50,000

41,30,000

-

-

30,00,000

5,40,000

35,40,000

76,70,000

26,70,000

2,003

25,00,000

4,50,000

29,50,000

1,06,20,000

29,50,000

2,213

90,00,000

16,20,000

1,06,20,000

 

56,20,000

4,215

Effect of this amendment on business are as follows:

Ø    You need to collect TCS from customer and they will get credit in Form 26AS.

Ø    Supplier will collect TCS from you and you will get credit in Form 26AS.

Ø    Advance Tax computation will change for F.Y. 2020-21

Ø    Billing may change. ERP change may be required.

SOURCE : CBDT

Disclaimer : TAXGyaAan is meant purely for the educational purpose of Tax Laws and Regulatory Updates. It will not be treated as professional advice. This Blog should not be substituted for professional advice. For specific Queries, please post in the comments section.

Labels:

Comments

Post a Comment

Popular posts from this blog

CONCEPT OF INPUT SERVICE DISTRIBUTOR (ISD)

By
What is Input Service Distributor (ISD)? As per Section 2(61) of CGST Act, “Input Service Distributor” has following characteristics: Ø       It is an office of the supplier of goods or services or both. Ø       It receives tax invoices issued under section 31 towards the receipt of input services. Ø       It issues a prescribed document for the purposes of distributing the credit of central tax, state tax, integrated tax or union territory tax paid on the said services. Ø       Such document is issued to a supplier of taxable goods or services or both having the same Permanent Account Number as that of the said office. Registration Requirement for Input Service Distributor (ISD) Section 24 of the CGST Act (read with Rule 8 of CGST Rules, 2017), requires an office of the supplier which intends to act as Input Service Distributor (ISD), to separately obtain registration as ISD. Returns for Input Service Distributor (ISD)...
8 comments
Read more

CLARIFICATION ON GSTR 9 (ANNUAL RETURN) & GSTR 9C (RECONCILIATION STATEMENT)

By
CBIC has extended due date of f urnishing of the Annual Return for the FY 2018-19 to 31.10.2020 (Notification No.69/2020-Central Tax dated 30.09.2020) Board has received certain representation that the auto populated GSTR 9 for the year 2018-19 (Tables 4, 5, 6 and 7) also includes the data for FY 2017-18.However, this information for FY 2017-18 has already been furnished by the taxpayers in the annual return (GSTR9) filed for FY 2017-18 and there is no mechanism to show the split of two years (2017-18 & 2018-19) in FORM GSTR-9 for 2018-19. In this regard, it is clarified that   the taxpayers are required to report only the values pertaining to Financial Year 2018-19 and the values pertaining to Financial Year 2017-18 which may have already been reported or adjustedare to be ignored. No adverse view would be taken in cases where there are variations in returns for taxpayers who have already filed their GSTR-9 of Financial Year 2018-19 by including the details of supplie...
2 comments
Read more

Time limit for issuance of invoice w.r.t. goods sent/taken out of India on approval extended to 31 Oct, 2020

By
Section 31 (7) of CGST Act,2017 provides that Notwithstanding anything contained in sub-section (1), where the goods being sent or taken on approval for sale or return are removed before the supply takes place, the invoice shall be issued before or at the time of supply or six months from the date of removal,whichever is earlier.   Notification no. 66/2020 of Central Tax dated 21st September 2020 provides that where any goods have being  sent or taken out of India on approval for sale or return , which falls during the period from the 20 March, 2020 to the 30 October, 2020, and where completion or compliance of such action has not been made within such time, then, the time limit for completion or compliance of such action, shall stand extended up to the 31 October, 2020. SOURCE : CBIC NOTIFICATIONS Disclaimer :  TAXGyaAan is meant purely for the educational purpose of Tax Laws and Regulatory Updates. It will not be treated as professional advice. This Blog should not be s...
Post a Comment
Read more