VST Industries Limited

Date: 17/06/2021

To,

PM Enterprises
A-88 PRINCE ROAD HARPAL NAGAR

MORADABAD-244001 UP

Sub: Intimation regarding Collection of TCS/ Deduction of TDS on Sale / Purchase

of goods in accordance with provisions of the Income Tax Act, 1961 (‘The Act’)

Dear Business Partner,

Finance Act 2020 had introduced a requirement for seller to collect TCS on sale of
goods at a specified rate on sale consideration exceeding Rs.50 lakhs in a financial
year. Accordingly, VST Industries Limited (VST) has been applying TCS at prevailing
rates on sale of goods to you.

Finance Act, 2021 has introduced two provisions with effect from 1 st July, 2021 that
impact transactions between us -

a) TDS under section 194Q

TDS under section 194Q of the Act to be deducted on purchase of goods @
0.1% if purchaser having total turnover/ gross receipt more than Rs.10 Crores
during immediately preceding financial year. TDS to be deducted on purchase
value exceeding Rs.50 lakhs.
Hence, if purchaser’s total turnover/ gross receiptsis more than Rs.10 Crores in
preceding financial year, liability to deduct TDS will shift to purchaser. However, if
purchaser’s total turnover/ gross receiptsis less than 10 crores, then VST will
continue to collect TCS on sales by VST to the purchaser.
b) Non-filer of return of income – at higher rates u/s. 206CCA of the Act
As per section 206CCA of the Act, a higher rate of TDS/ TCS is applicable if a
person has not filed income-tax return for both of the two preceding years
immediately prior to the previous year in which tax is required to be collected
within the time limit prescribed under section 139(1) of the Actand aggregate of
TDS and TCS is Rs.50,000 or more in each of these two preceding years. Thus,
a declaration is to be given for non-application of high rate of TDS/ TCS @ 5%.
Applicability of TDS/ TCS provision on sale / purchase of goods has been
captured below:

Registered Office: Azamabad, Hyderabad – 500 020; Phone: 91-40-27610460; Fax:91-40-27615336;

CIN: L29150TG1930PLC000576; Email: corporate@vstind.com; website: www.vsthyd.com
 VST Industries Limited

Particulars From 1st From 1st

Oct 2020 April 2021
till 31st till 30th From 1st July 2021*
March 2021 June 2021
Purchaser Purchaser
turnover less turnover
than Rs.10 more than
Crores Rs.10 Crores

TDS/ TCS Type TCS by Seller TDS by the

Purchaser

Customer having valid 0.075% 0.10% 0.10% 0.10%

PAN

Customer not having 1% 1% 5% 5%

valid PAN**

* Relevant amendment by Finance Act, 2021

** includes non-filers of return of income w.e.f. 1st July, 2021.
Impact on VST dealers:
VST will stop collecting TCS from 1st July, 2021 on sales to those dealers whose
total turnover/ gross receipts is more than Rs.10 crores. In all such cases, TDS
will be deducted by the dealer only on purchase value exceeding Rs.50 lakhs.
Further, dealers need to ensure timely deposit of TDS deducted to government
exchequer and filing of TDS returns. VST shall give credit to the dealer only on
submission of TDS certificate. In case dealer fails to deposit TDS orfails to file
TDS returns and credit of TDS does not appear in Form 26AS, then VST has the
right to recover the amount including interest from the dealer.
Wherever dealer’s total turnover/ gross receiptsis less than Rs.10 crores, VST
shall collect TCS on sales and will be issuing TCS certificate to dealers
(wherever required) and tax credit can be claimed by the dealers based on these
certificates and credit appearing in Form 26AS at the time of filing of Annual
Income tax returns.
Please provide confirmation in the format annexed by 24 th June, 2021 to enable
the Company to supply goods from 1 st July 2021. In case the declaration is found
false or incorrect, you will be required to indemnify VST for any interest and
penal liability in the Income-tax Act arising due to such false declaration.

Thanking you,
For VST Industries Limited

Authorised Signatory

Registered Office: Azamabad, Hyderabad – 500 020; Phone: 91-40-27610460; Fax:91-40-27615336;

CIN: L29150TG1930PLC000576; Email: corporate@vstind.com; website: www.vsthyd.com