TCS ON SELLING OF ANY GOODS

Q. From when and on what are TCS provisions applicable?

A. TCS provisions are applicable from 01st October 2020 on sale of all type of Goods except where TDS and TCS provisions
are already applicable on those transactions

Q. Who is responsible person to collect?

A. A Seller whose turnover crosses INR 10 Crores in the preceding financial year. (F.Y.2019-20 turnover to check applicability
for F.Y.2020-21)

Q. When the tax should be collected? (Point of Collection)

A. Seller should collect at the time of receipt of such amount.

Q. From whom the tax should be collected?

A. Value or aggregate amount of consideration received crosses INR 50 lakhs. INR 50 Lakhs should be considered for whole
year of 2020-21. If Turnover with a customer is 40 Lakhs till September 2020 and post September 2020 it is INR 20 Lakhs, then
TCS needs to be collected and paid on INR 10 Lakhs.

Q. What does consideration includes?

A. For collection of TCS consideration amount will be inclusive of GST as per existing interpretation. There are mixed views on
the same but clarity is awaited on this aspect.
Q. Rate of collection?
A. Percentage of the collection is 0.1%. In case of no availability of PAN or Aadhar, rate will be 1%.
(Please note that TCS Rate is been reduced to 0.075% for the period from 01.10.2020 to 31.03.2021.)

Q. Invoicing and Point of Collection of Tax?

A. The seller needs to raise sale invoice including the amount of TCS and the same is accounted in the books as a TCS liability even
though it is not payable at time of invoice. The liability of TCS under Section 206C (1H) is to be paid when the amount is collected from the
Customer. Accordingly new account heads needs to be created for TCS Accrued but not due and TCS Accrued and Due.
Alternatively the Seller can pay TCS on sales collection by reverse calculation and then raise a monthly debit note for TCS which the Buyer
can pay separately. The stand may vary from customer to customer.

Q. What about Invoices raised before September 2020 and collection received post September 2020?
A. On basis of current reading of the section there is no exemption on collections made post September 2020 relating to Invoi ces raised in
pre September 2020 period.

Q. Non applicability of the provision?

A. If buyer is liable to deduct TDS under Income Tax Act or If the goods sold are already covered other TCS provision or a buyer which is
importing goods.

Q. Payment and Return?

A. PAYMENT: The person responsible for collecting tax shall deposit the TCS amount within 7 days from the last day of the month in which the
tax was collected.
RETURN: Every tax collector shall submit quarterly TCS return i.e., Form 27 EQ in respect of the tax collected by him in a particular quarter.