TCS ON SALE OF GOODS.

 

Applicability:

 

All Seller of goods (Seller of Services not covered) whose turnover (Sales) during the preceding previous year i.e. FY 2019 – 2020 is more than INR 10 Crores, they have to collect the tax (TCS) at the time of raising of invoices to the buyer and pay such tax (TCS) on receipt of payment from the buyer to the government exchequer w.e.f. 1st October 2020. This provision would be applicable only after threshold exemption limit of INR 50 Lakhs sale to each buyer of the goods.

This provisions would not be applicable if seller sells the goods to –

(i)    the Central Government, a State Government, an embassy, a High Commission, legation, commission, consulate and the trade representation of a foreign State; or

(ii)    local authority as defined in the Explanation to clause (20) of section 10; or

(iii)   a person importing goods into India or any other person as notified by Central Government.; or

 

(iv)    buyer is liable to deduct tax at source (TDS)

 

Rate of Tax

 

TCS have to be collected @ 0.1% of the value of goods (excluding taxes i.e. GST) if the buyer is having PAN / Aadhar Card. If buyer do not have PAN / Aadhar Card, rate of TCS would be 1% of the value of goods (excluding taxes i.e. GST).

 

	PAN or Aadhar	PAN or Aadhar
	is available	is not available
Total Sales / Turnover / Gross Receipts in PFY	25 Crores	25 Crores
Sale of Goods including other Expenses during year to a single party	1,00,00,000	1,00,00,000
GST	18,00,000	18,00,000
Amount realized	75,00,000	75,00,000
Exemption from TCS provisions	50,00,000	50,00,000
Amount eligible for TCS	25,00,000	25,00,000
Tax to be collected from the buyer	2,500	25,000

 

Note: TCS rate for the period 01-10-2020 to 31-03-2021 would be 0.075% of the value of goods (excluding taxes i.e. GST) if the buyer is having PAN / Aadhar Card. If buyer do not  have PAN / Aadhar Card, rate of TCS would be 0.75% of the value of goods (excluding taxes i.e. GST).

 

 

Payment of Tax (TCS) and Return

 

Seller of goods has to make the payment of tax (TCS) in to Government Exchequers within 7 days of the next month i.e. payment realized in the month of August 2020 from their buyers, tax will have to be deposited in to Government Exchequers by 7th of September 2020.

Moreover, Seller of the goods have to also furnish quarterly return in Form 27EQ in respect of tax collected (TCS) by them during the quarter by 15th of the next quarter.