All About TCS Provisions of Section 206C(1H)

Introduction of Section 206C (1H):

As per section Section 206C (1H), each seller who has received any amount in the form of sale consideration that is above Rs 50 lakhs has to collect 0.1% of the bill amount from the aforesaid buyer, collect PAN and pay TCS every month.

Date of Application Section 206C(1H):

This provision has applied from October 1, 2020. It shall be applicable to all those sellers of goods whose turnover exceeds Rs 10 crores for the preceding financial year.

Buyer Definition u/s Section 206C (1H):

Buyer includes an individual who purchases any goods but does not include the entities i.e. The Central Government, the State Government, the Embassy, the High Commission, and so on of a foreign state are not included in the domain of the buyer.

The Local Authority shall also not be included
A Person importing goods in India shall not be included
Any person as per notification of the Central Government shall not be included

 

Read Also : Important FAQ’s of TCS on Sale of Goods

 

 

Who is Seller As per Section 206C (1H)

Seller includes a person whose total sales turnover or gross receipts from the business that is carried on by him exceeds Rs 10 crores and does not include a person who is notified by the official gazette of the government. The following points shall make clear the aforesaid definition.

A business which started in the FY 2020-21 shall not be liable to collect the TCS.

The payment received on or after October 1, 2020, related to the sales made before October 1, 2020, shall be liable for TCS.

The Tax Collected at Source shall be collected from the buyer to whom sales exceeding Rs 50 lakhs have been made annually. For Instance, in the case of a sale of 70 lakhs to a single buyer, TCS is necessary to be collected at the rate of .1% on Rs 20 lakhs only.

If a person does not furnishes his Permanent Account Number (PAN) then rate of 1% shall be imposed instead of 0.1%.

The TCS shall not be made applicable where TDS is being deducted or TCS is being collected.

This provision shall not be applicable in the case of exporting goods and sales that have been made to the government.

 

Read Also : Important FAQ’s of TCS on Foreign Remittance Through Liberalized Remittance Scheme

 

Example:

Case-:I  Sale of a car Kia Seltos to Mr Ravi for 9,60,000 (including GST) – In this páse TDS u/s 206C(1H) & (1F) not applicable.

Case-II: Sale of a 7 cars Kia Seltos to Mr Ravi for 9,60,000 each (including GST) & received 67,20,000 by dealer

Solution: In this case TCS u/s 206C(1F) not applicable but Acs u/s 206C(1H) is applicable dealer will collect TCS @ 0.1% of amount in excess of Rs:50,00,000 i.e. Rs:17,20,000.

Case-III Sale of a car BMW GT to Mr Kavi for 92,00,000 (including GST).

Solution: In this case TCS u/s 206C(1F) applicable & dealer will collect TCS @ 1% of 92,00,000.

Case-IV: BMW India Ltd. sold 200 cars to Navneet Motors in Py 21-22 and total consideration received is 150 Crores.

Solution: In this case Navneet motors will deduct TDS of BMW India Ltd @0.1% in excess of 50 lakhs u/s 194Q.

Case-V: Navneet Motors sold a Kia Carnival to MR Devam and consideration is as follows:

Solution:In this case Navneet motors will collect TCS u/s 206C(1F) on 34,04,000