Applicability
a) Turnover > Rs. 10 Crores: Person having sales turnover or gross receipts exceeding Rs. 10 crores in the immediately preceding financial year; and
b) Sale > Rs. 50 Lakhs: Receives any amount as consideration for sale of any goods (excluding exports) of the value or aggregate of such value exceeding Rs. 50 lakhs.
c) Excluding:
- export of goods
- goods already covered under TCS provisions
- buyer is required to deduct TDS of the seller on such transaction
- if the buyer is Central Government, State Government, Local Authority, Embassy/ Consulate/ High Commission
TCS @ 0.1% w.e.f. 01-Oct-2020
a) Rate: From 01-Oct-2020, such seller will have to collect TCS at the rate of 0.1% on the sales consideration received from buyer exceeding Rs. 50 lakhs.
b) Reduced Rate up to 31-Mar-2020: Only for the period between 01-Oct-2020 to 31-Mar-2021, such TCS will be at the reduced rate of 0.075%.
c) No PAN Case: In case the buyer does not provide his PAN, TCS is to be charged @1% (reduced to 0.75% only up to 31-Mar-2020).
Payment & Return Filing
a) Payment Date: Such TCS charged will have to be deposited with the government within 7 days from the end of the month in which such amount of the consideration was collected.
b) Return Form: Details of the buyer's PAN and the amount of TCS credit has to be filed in a quarterly return called Form 27EQ.
c) Return Filing Due Dates: The due dates for return filing are as under.
Apr-Jun: 15-Jul
Jul-Sep: 15-Oct
Oct-Dec: 15-Jan
Jan-Mar: 15-May
d) TCS Certificate: A Certificate in Form 27D will also have to be issued to the buyer within 15 days of filing such return.
Interest & Penalty
a) Interest @1% per month would become payable for late deposit of TCS.
b) Late filing of return may attract late fees of Rs. 200 for every day of delay, up to the total amount of TCS for that quarter.
Important Points
a) As per Section 145A of the Income Tax Act, 1961, irrespective of the treatment in books of accounts, the value of sales will include the amount of any tax recovered. Hence the consideration amount will be inclusive of GST for the purpose of collection of TCS.
b) The amount is payable to the government within 7 days from the end of the month in which the consideration is received, and not from the month in which the invoice is raised.
References
Section 206C(1H) of the Income Tax Act, 1961
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Edit (29-09-2020): The CBDT has issued Circular No. 17 clarifying on the TCS provisions. Among other matters, it has been clarified that TCS is to be collected and paid on all payments received on or after 01-Oct-2020 including on amount of GST and also with respect to sales made prior to 01-Oct-2020.
