30 FAQs on TCS on sale of goods

 With  effect  from  01-10-2020, the  Finance  Act,  2020 inserted  Sub-Section (1H)  in Section 206C. This provision requires a seller to collect tax at source  from the amount received as  consideration for  the  sale  of  goods  if it  exceeds  Rs. 50 lakhs  in  any previous year.  To clarify  certain  doubts about  the applicability of the provision and the computation of the threshold, the CBDT has issued Circular No. 17/2020, dated 29-09-2020

In this  article,  we  have  covered all Frequently Asked  Questions (FAQs)  about  the requirement to collect TCS on sale of goods  with effect from 01-10-2020.

 

FAQ 1.     Who is liable to collect  tax on the sale of Goods?

Tax is required to be collected by a person carrying on business whose  total  sales, gross  receipts or  turnover exceeds  Rs. 10 crores  in the  financial year  immediately preceding the financial year of sale.

 

Example, the  liability  to  collect  tax  in  the  financial year  (FY) 2020-21 arises  if the turnover was more  than  Rs. 10 crores  in FY 2019-20. There  is no obligation to collect TCS in FY 2020-21 if turnover was less than  Rs. 10 crores in FY 2019-20.

 

FAQ 2.     From whom tax shall be collected?

 

The tax shall be collected from a buyer if the following conditions are satisfied:

 

 

(a) There is a sale of goods  to such a person;

(b) The seller  receives  any  amount as consideration for the sale of any  goods  of the value  or aggregate of such value  exceeding Rs. 50 lakhs in any previous year; and

(c) The buyer should not  be in the  list of persons excluded from  the  provision for collection  of tax.

 

The tax shall  not  be collected under this  provision if the  goods  are  sold  by way  of export out  of India,  or the  tax  is deducted or collected under any  other  provision. Further, the tax shall not be collected if the buyer is:

 

(a) Central Government;

(b) State Government;

(c) An Embassy, High  Commission, a Legation, a Commission, a Consulate or Trade

Representation of a Foreign  state;

(d) Local Authority;

(e) A person importing goods  into India; and

(f)  Any other  notified person.

 

FAQ 3.     What  shall be the timing of collection of tax?

 

Section 206C(1H) provides as follows:

 

“Every person, being a seller, who receives  any  amount as consideration for  sale  of any goods  of  the value  or  aggregate  of  such  value  exceeding  fifty lakh  rupees  in  any previous year, other than the goods being exported out of India or goods covered in sub-section (1) or sub-section (1F) or sub-section (1G) shall, at the time of receipt of such amount, collect from the buyer, a sum equal to 0.1 per cent of the sale consideration  exceeding  fifty lakh rupees as income-tax”.

 

Following three  interpretations can be derived after a plain  reading of the provision:

 

(a) Tax to be collected when both the amount of sale and  the amount received as sale consideration exceeds  Rs. 50 lakhs during the previous year;

(b) Tax to be collected when the amount of sale exceeds Rs. 50 lakhs irrespective of the amount of sale consideration received during the previous year; or

(c) Tax to be collected when the amount received as sale consideration exceeds  Rs. 50 lakhs irrespective of the amount of sale made  during the previous year.

 

The  interpretation in  the  point   (c) above  shall  be  more  convenient, realistic  and reasonable and  in support of this,  we have  the  arguments discussed in the  ensuing paragraphs.

 

On  the  doubt of applicability of the  TCS provision on  the  consideration received before 01-10-2020, the CBDT in Circular No. 17, dated 29-09-2020, at Para 4.4.2(ii) has clarified  that “this provision applies on receipt of sale consideration, thus the provision of this sub-section shall not apply on any sale consideration received before 01-10-2020. Consequently, it would apply on all sale consideration (including advance received for sale) received on or after 01-10-2020 even if the sale was carried out before 01-10-2020”. Though the  clarification has  been  given  in respect of another issue,  but  the  language of the CBDT’s circular indicates that  the  tax  should be collected when the  consideration received during the previous year exceeds  the threshold limit.

 

Further, it brings  administrative convenience both for the collector and the revenue as it will be easy to correlate the actual  receipt  during the previous year with  the tax so collected during the same period.

 

Thus, the tax should be collected at the time of receipt  of amount from the buyer if the value  of sale consideration received in a previous year exceeds  Rs. 50 lakhs.

 

Example, the applicability of rate of tax has been enumerated in the below  table:

 

(Amount in Rs.)

 

Particulars	2019-20	2020-211	2021-22	2022-23
Sale (A)	60,00,000	70,00,000	55,00,000	55,00,000
Outstanding balance    as   on the  first  day  of the year (B)	-	40,00,000	10,00,000	20,00,000
Total Receipt (C)	20,00,000	1,00,00,000 (Rs. 55 lakhs received on or before 30-09-2020)	45,00,000	65,00,000
Outstanding balance    as   on last  day   of  the year  (D = A + B – C)	40,00,000	10,00,000	20,00,000	10,00,000
Tax       to     be collected	Nil (Note 1)	Rs. 4,500 (Note 2)	Nil (Note 3)	Rs. 1,500 (Note 4)
Note 1: As Section  206C(1H)  is applicable from  01-10-2020, no  tax  to be collected in the financial year 2019-20.   Note 2: Tax will be collected only in respect of sale consideration received on or after 01-10- 2020, i.e. Rs. 45,00,000 * 0.1% = Rs. 4,500   Note 3: No tax shall  be collected as the amount of sale consideration received during the year does not exceed Rs. 50 lakhs.   Note 5: The tax shall be collected on receipt  in excess of Rs. 50 lakhs,  i.e. 15,00,000 * 0.1% = 1,500

 

FAQ 4.     Is a non-resident, selling goods from  outside India, required to collect tax at source under this  section?

 

The definition of a buyer in Explanation to Section 206C(1H) specifically excludes ‘any person importing goods into India’ from its ambit.  Hence,  the obligation to collect tax at source  is not triggered in the hands of the non-resident seller.

 

FAQ 5.     In absence of any definition of ‘goods’, what shall be construed as a sale of goods?

 

The term  ‘goods’ is not  defined in the  Income-tax Act. The term  ‘goods’ is of wide import. Anything which  comes to the market can be treated as goods.  However, this term  ‘Goods’ has been defined under the Sale of Goods  Act, 1930 and  Central Goods and Services Tax Act, 2017.

 

 

 

 

 

1 It is to be noted  that The Taxation  and Other  Laws (Relaxation and Amendment of certain provisions) Act, 2020, has reduced the rate of TCS by 25% (i.e. 0.075%) for the period from 14-05-2020 to 31-03-2021. However, for understanding we have computed the TCS as per the standard rate of 0.1%.

 

Sale of Goods  Act, 1930

 

‘Goods’ means every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale”

 

Central Goods  and Services Tax Act, 2017

 

‘Goods’ means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply”

 

The Sale of Goods  Act, 1930 is a specific statute which  deals  with  the ‘sale of goods’ whereas the CGST Act, 2017 deals  with  tax on ‘supply of goods’. Thus, the definition of term ‘goods’ can be referred to from the Sale of Goods  Act, 1930 for the purpose of Section 206C(1H).

 

Thus,  the tax shall  be collected from the sale consideration received from  the sale of any  good,  provided the tax is not  collected or deducted under any  other  provision. Therefore, the tax to be collected from the receipt of consideration in respect of the sale of the following:

 

(a) Movable property;

(b) Any commodity;

(c) Shares or Securities;

(d) Electricity;

(e) Agriculture produce;

(f)  Fuel;

(g) Motor  vehicle;

(h) Liquor;

(i)  Jewellery  or bullion;

(j)  Art or Drawings;

(k) Sculptures;

(l)  Scraps;

(m)Forest produce, etc.

 

FAQ 6.     Whether  a  transaction in  securities  through stock exchanges   shall be subject to TCS under this provision?

 

Concerns have been raised about  the applicability of the TCS provision in respect of transactions through stock exchanges (or commodity exchange)as there  is no one-to- one contract between the buyers and sellers.

 

The  CBDT has  clarified   that  provisions of  this  section  shall  not  be  applicable in relation to transactions in securities (and  commodities) which  are  traded through recognised  stock   exchanges  or  cleared  and   settled  by  the   recognised  clearing

 

corporation, including recognised stock  exchanges or  recognised clearing corporations located in International Financial Service Centre  (IFSC).

 

FAQ 7.     Whether TCS  to be  collected on  the  sale  of immovable property by  a developer?

 

As referred to above, ‘goods’ means every kind of movable property subject to certain exceptions and  inclusions. Thus,  the  immovable property shall  not  be  treated as

‘goods’. Consequently, the  TCS shall  not  be collected from  the  sale  of immovable property by a developer.

 

FAQ 8.     Whether TCS shall be collected on the sale of a motor vehicle?

 

 

There is a specific provision in Section 206C(1F) for the collection  of tax on the sale of a motor vehicle. Under this provision, the tax shall be collected from every buyer who pays   any  amount as  consideration  for  the  purchase  of  motor   vehicle   of  value exceeding Rs. 10 lakhs.  The Finance  Act 2020 has introduced a general provision for collection  of TCS on sale of goods under section 206C(1H). This provision specifically excludes TCS on motor  vehicle,  which  is covered under section  206C(1F), from  its ambit.

 

Vide Circular No. 22/2016, dated 8-6-2016, the CBDT has clarified  that the provisions of Section  206C(1F) will  not  apply on  sale  of motor  vehicles  by  manufacturers to dealers/distributors. The CBDT vide Circular No. 17, dated 29-09-2020 now  clarifies that  the tax shall  be collected under Section  206C(1F) in the case of sale of a motor vehicle  to a consumer (B2C), and  sub-section (1H) shall  apply for the sale of motor vehicle to the dealers or distributors (B2B). Hence, the sale of Motor vehicles to dealers which  is not covered in section  1(F) shall be subject to TCS under this new provision. Further, sales to consumer where the consideration for a single vehicle is less than Rs.

10 lakhs  but  the  aggregate value  of which  exceeds  Rs. 50 Lakhs  during a previous year, it shall be subject to TCS under this new provision.

 

FAQ 9.     Whether TCS is required to be collected on transaction in electricity?

 

 

Section 206(1H) provides for the collection  of tax on the sale consideration received for the sale of goods.  The Apex Court  in the case of State of Andhra Pradesh v. National Thermal Power Corporation (NTPC) (2002) 5 SCC 203, held  that electricity is a movable property though it  is not  tangible. It  is a 'good'. Further, Custom Tariff  Act  has covered ‘Electricity’ under heading 2716 00 00, which  also clarifies  that  Electricity  is a goods.  Thus, it is clear that electricity is a good. Thus, the tax shall be collected from the consideration received in respect of the transaction in electricity.

 

A transaction in electricity can be undertaken either  by way of direct  purchase from the company engaged in generation of electricity or through power exchanges. The CBDT has  clarified  that  the  transaction in electricity, renewable energy certificates and  energy-saving certificates traded  through  power exchanges registered under Regulation 21 of the CERC shall be out of the scope of TCS under this provision. Thus,

 

it can be concluded that tax is required to be collected where electricity is purchased directly from electricity generation companies.

 

FAQ 10.   Whether Fuel supplied to non-resident airlines be subject to TCS under this provision?

 

A concern has been raised whether the tax should be collected from the supply of fuel to non-resident airlines. The CBDT vide Circular No. 17, dated 29-09-2020 has clarified that  the provisions of this section  shall not apply on the sale consideration received from the fuel supplied to non-resident airlines at airports in India.

 

FAQ 11.   Whether TCS should be collected on the sale of software?

 

Taxation of software has always been a subject of debate under the Income-tax Laws. The issue was also litigative under the erstwhile indirect tax laws (VAT, Service Tax etc.) where states  were  levying VAT on the sale of goods  and  Centre  were  levying service-tax on the provision of services.  With  the passage of time,  the Judiciary has laid  down some  principles, which   enable   the  taxpayers, to  determine when the supply of software would qualify as a supply of goods and when it would be a supply of services.  The issue  is not much  litigative under the GST regime as the tax rate  in both cases is the same.

 

However, in  absence  of any  guidelines in  the  Income-tax, such  classification has always been  a  subject  matter of  litigation. The  Finance   Act  2012  has  made   the clarificatory amendments in Section 9 to broaden the scope of taxation of royalty. This has been clarified  by the amendment that the consideration for the use or right to use of computer software is a royalty. The factors of the medium, ownership, use or right to use  and  location  have  been  clarified  as immaterial. The amendments have,  thus, given  a new  dimension to tax administration in the sphere of royalty taxation. The payment towards royalty is subject  to TDS under Section  194J or Section  195. The provision of section  206C(1H) would not  apply where the buyer is liable  to deduct tax at source  on the purchase of goods  from  the  seller  and  has  deducted the  tax at source.

 

The Supreme Court  in its landmark decision of Tata Consultancy Services v. State of A.P [2004]  141  Taxman  132  (SC)  held   that  Canned software (off  the  shelf  computer software) are 'goods' and  as such  assessable to sales tax. Hence,  the requirement to collect TCS shall be decided on the basis whether the sale of software has been treated as ‘sale of goods’ or ‘sale of service’. If the same has been treated as a sale of service, it shall not be subject  to TCS but the provisions of TDS under section  194J or 195, as the case may  be, may  apply. However, if the sale of software has been  treated as a sale of goods  then  the seller shall be liable to collect TCS subject  to the fulfilment of other  conditions of this provision.

 

FAQ 12.   Whether TCS is liable to be collected on Sale of Jewellery by a Jeweller?

 

Up to the  previous year  2016-17, Section  206C(1D) requires the  collection  of tax at source  at the rate of 1% from the sale consideration received on cash sale of bullion, jewellery or any  other  goods  or for providing any  service.  The aforesaid provision has been omitted by the Finance  Act, 2017 with effect from 1-4-2017.

 

The Finance  Act 2020 has introduced a general provision for collection  of TCS on sale of goods.  Jewellery,  being  a movable property, is covered within the  term  goods. There is no specific exclusion under Section 206C(1H) for collection  of TCS on sale of jewellery. Thus,  a Jeweller  shall  be liable for the collection  of tax if other  conditions are also fulfilled.

 

FAQ 13.   Whether TCS is liable to be collected from  re-sale of goods?

 

Under Section  206C(1H), a person shall be treated as a seller  if the total  sales, gross receipts or turnover of the  business carried on by him  exceeds  the  threshold limit. Once a person is qualified as a seller he will be liable for the collection  of tax where the value or aggregate of the value of sale consideration received exceeds Rs. 50 lakhs in any previous year, irrespective of the fact that  the sale is in course  of the business or not. Thus, where a person, who  is re-selling the goods,  falls within the definition of the seller, he will be liable for the collection  of tax. However, if a person, re-selling the  goods,  is not  engaged in carrying on of any  business, no tax shall  be collected under this provision.

 

Example, Mr A (a salaried person) buys  jewellery of Rs. 60 lakhs from a Jeweller.  The Jeweller collects a tax of Rs. 1,000 (0.1% of Rs. 10 lakhs) under section 206C(1H). If Mr A re-sells the jewellery for Rs. 70 lakhs  to the same  jeweller,  he shall not be liable to collect tax as he is not engaged in any business or profession.

 

FAQ 14.   Whether additional, allied and  out-of-pocket expenses form  part  of sale consideration?

 

It is imperative to accurately determine the  amount of sales  consideration as it is relevant both for the applicability of the provision and amount from which tax should be   collected.  Additional,   allied   or   out-of-pocket  charges  recovered  from   the customers may or may not form part  of the sale consideration. Where  these expenses have   been   reflected  in  the  sales  invoice   itself,  it  should form   part   of  the  sale consideration. If they are charged through a separate invoice, it should not form part of the sale consideration.

 

FAQ 15.   At what rate tax is to be collected?

 

The  tax  shall  be  collected by  the  seller  of  goods   at  the  rate  of  0.1% of  the  sale consideration exceeding Rs. 50 lakhs if the buyer has furnished his PAN or Aadhaar, otherwise, the  tax shall  be collected at the  rate  of 1%. The rate  shall  not  be further increased by Surcharge and  Health & Education Cess if the sum  is collected from  a resident person. However, the  rate  of  TCS  shall  be  increased by  the  applicable

 

surcharge and  health and  education cess if the  payee  is a non-resident person or a foreign  company.

 

To provide more funds at the disposal of the taxpayers for dealing with the economic situation arising out of COVID-19 pandemic, the rates of TCS for the specified receipts have  been  reduced by  25% for  the  period from  14-05-2020 to  31-03-2021 vide The Taxation and  Other  Laws  (Relaxation and  Amendment of certain  provisions) Act,

2020. Hence, the rate of TCS on sale of goods  shall be 0.075% till 31-03-2021. However, if the buyer does not submit the PAN or Aadhaar the benefit  of the reduced rate shall not be available.

 

FAQ 16.   From which date  the threshold limit of Rs. 50 lakhs will  be computed?

 

The Finance  Act 2020 inserted sub-section (1H) in section  206C, with  effect from 01-

10-2020, to  provide for  the  collection  of tax  on  certain  sales.  The  TCS has  to  be collected if the  value  or  aggregate of the  value  of the  sale  consideration received during the  previous year  exceeds  Rs. 50 lakhs.  How  this  limit  of Rs. 50 Lakh  for collecting TCS shall be reckoned for the financial year 2020-21? Should it be from 01-

04-2020 or 01-10-2020?

 

 

The CBDT vide Circular No. 17, dated 29-09-2020, has clarified  that since the threshold of Rs. 50 lakhs  is with  respect to the previous year,  calculation of sale consideration for triggering TCS under this provision shall be computed from 01-04-2020. Hence,  if a seller has already received Rs. 50 lakhs or more  up to 30-09-2020 from a buyer, TCS under this provision shall apply on all receipts of sale consideration on or after 01-10-

2020.

 

FAQ 17.   Whether TCS is to be collected on the  total  invoice value including the

GST?

 

Section 206C(1H) provides that TCS shall be collected on the consideration for "sale of any  goods".  Thus,  in common parlance, the  price  bargained for the  goods  could  be regarded as consideration of goods.  The question arises  whether the GST shall  form part  of the consideration or not.

 

The CBDT vide Circular No. 17, dated 29-09-2020, has clarified  that since the collection is made  with  reference to receipt  of the amount of sale consideration, no adjustment on account of indirect taxes including GST is required to be made  for the collection  of tax   under  this   provision.  Thus,   TCS  is  required  to   be  collected  on   the   sale consideration inclusive of GST.

 

FAQ 18.   Whether TCS has to be collected on advance received from  the buyer?

 

TCS under section  206C(1H) is required to be collected on consideration received for the  sale  of goods.  Section  4(3) of the  Sale of Goods  Act, 1930, provides that  where under a contract of sale the property in the goods  is transferred from the seller to the buyer, the contract is called a ‘sale’, but where the transfer of the property in the goods

 

is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an ‘agreement to sell’.

 

Section  206C(1H) provides that  tax is required to be collected where the  amount is received as consideration for the sale of goods.  It does not mention whether such sale needs  to  be effected  immediately or  at  a future date.  As the  tax  is required to  be collected at the time  of receipt  of consideration, it should be reasonable to conclude that  the provision may  get attracted even  if such  sale happened in past,  happens in present or would happen in future. Further, the CBDT vide Circular No. 17, dated 29-

09-2020, has clarified  that  TCS is required to be collected under this provision from the advance received for sale.

 

As long  as the intention is to adjust  the advance payment against the future sale of goods, the tax should be collected at the time of receipt of consideration. If the advance payment is not made  with an intention to adjust  it against future sale (deposit or loan) but eventually it is adjusted against the future sale, no tax is required to be collected at the time of receipt  of such advance.

 

FAQ 19.   Whether advance received before 01-10-2020 for sale to be made after this date  will  be subjected to TCS?

 

The  CBDT vide Circular No.  17, dated 29-09-2020 has  clarified   that  provisions of section  206C(1H)  shall  not  apply on  any  consideration received before  01-10-2020. Consequently, it would apply on all sale consideration, including advance received for sale, received on or after 01-10-2020 even if the sale was carried out before  01-10-

2020.

 

 

In simple  words, the tax should be collected where the amount is received on or after

01-10-2020. Thus,  where the  trigger event  (i.e., receipt   of  sale  consideration) has occurred before  the  date  of applicability of provision, no liability  to collect  tax will arise. On the contrary, where the sale has been made  before  the date  of applicability of the  provision but  the  sale consideration is received after  the  said  date,  the  same shall be subject to TCS.

 

FAQ 20.   Whether the amount received as loan  from  buyer shall come within the ambit of this  provision?

 

The requirement to collect  TCS under this  provision arises  if the  sale consideration received during the previous years exceeds the threshold. The collection  is to be made at the time of receipt  of the consideration for the sale of goods.  Since the loan received from  the  buyers is not  a consideration towards the  sale  of goods,  it shall  remain outside the purview of this provision. Hence,  there  is no requirement to collect TCS on loan received from the buyer. However, if at any future date,  such loan amount is settled against sales consideration the liability  to collect TCS shall arise. The tax shall be collected on the date on which  parties agreed to adjust  the loan amount against the outstanding liability.

 

FAQ 21.   Whether tax to be collected on the transfer of goods from  one branch to another?

 

The TCS under this section  is required to be collected by any  person, being  a seller receiving consideration for  the  sale  of goods.  Thus,  the  existence  of two  distinct parties as ‘seller’ and ‘buyer’ is a pre-requisite to construe a transaction as a sale. The condition of  sale  is not  fulfilled in  the  context  of branch transfer. Therefore, the provisions of this section  shall not apply in the case of branch transfers.

 

FAQ 22.   What  shall be the treatment of credit note  for computation of TCS?

 

As the  tax  has  to be computed on  the  consideration received from  the  buyer, the adjustment made  to the ledger of the buyer by issuing the credit  note  will not have an impact on the tax to be collected. The position would remain the same if, after the collection  of tax, the seller repays some consideration to the buyer. In such a situation, the amount of sale consideration so received by the seller shall not be reduced with the amount so refunded for calculation of TCS.

 

FAQ 23.   If the  buyer has  multiple units, whether sales  made to different units need to be aggregated?

 

Where  tax is required to be collected at source,  the collectee is required to furnish his PAN  or  Aadhaar number to  the  collector  failing  which  the  tax  is required to  be collected at higher rates.   If the PAN  or Aadhaar number is available, the threshold limit of Rs. 50 lakhs shall be computed in respect of each PAN or Aadhaar number. In other  words, if different units  of buyer are under the same PAN or Aadhaar number, the amount received from  all such  units  shall  be aggregated to compute the limit  of Rs. 50 Lakhs.

 

FAQ 24.   Can a buyer apply for the certificate for lower collection of TCS?

 

An assessee can apply to the Assessing Officer to issue a certificate for collection  of tax at lower  rates. Such certificate shall be issued if existing  and  estimated tax liability  of assessee  justifies collection  of tax at a lower  rate.

 

However, Section 206C(9) of the Income-tax Act does not extend the benefit  to apply for lower  tax collection  at source  for the section  206C(1H). Hence,  the assessee  does not  have  the  option to approach the  assessing officer  to issue  lower  tax  collection certificate for transactions covered under section  206C(1H).

 

FAQ 25.   How  to deposit the TCS?

 

A corporate assessee  and  other  assessees (who  are subject  to tax audit under Section

44AB) will  have  to  make  payment of  tax  (including TCS) electronically through internet banking facility or by way of debit  cards. To deposit the tax, the collector  has to fill the Challan No. ITNS 281.

 

Other  collectors  can deposit the tax so collected into any branch of the RBI or the State

Bank of India or of any authorized bank.

 

FAQ 26.   What  is the due  date  to deposit TCS?

 

Tax collected during the  month shall  be deposited on or before  7th  day  of the  next month in which  tax has been collected.

 

FAQ 27.   What  shall be consequences for failure to collect  or pay TCS?

 

If any person, responsible for the collection  of tax at source,  fails to collect the whole or any part  of the tax or after  collection  fails to deposit the same  to the credit  of the Central Government, then he shall be deemed to be assessee-in-default.

 

If a collector  fails to collect  or after  collection  fails to pay  it to the  credit  of Central Government, he shall be liable to pay interest at the rate of 1% for every month or part thereof on the amount of tax he failed to collect or pay. The interest shall be calculated for the period starting from  the date  on which  tax was  required to be collected and ending on the date on which tax is deposited. The interest is required to be paid before furnishing the TCS return.

 

FAQ 28.   Whether seller shall be treated as assessee in default if the  buyer pays tax due  on the income declared in the return of income?

 

A seller is not deemed to be in default if the amount is received from  a person who has considered such amount while  computing income  in the return and  has paid  the tax due  on such declared income.  The receiver  will have to obtain  a certificate to this effect from a Chartered Accountant in Form No. 27BA and submit it electronically.

 

However, this relief is allowed only in respect of the following:

 

 

1.   Sale of alcoholic  liquor,  scrap, etc. [Section 206C(1)]

2.   Lease or licensing of parking lot or toll plaza  or mine or quarry [Section 206C(1C)]

 

 

There  is no reference of Section  206C(1H)  under the  provision providing the  relief from  being  treated as an  assessee  in default. Hence,  the  seller  shall  continue to be deemed as assessee-in-default even if the buyer has taken  in to account the purchase amount while  computing his income  and  has paid  tax due  on the income  declared in the return.

 

FAQ 29.   What  is the due  date  for filing of TCS return?

 

The statement of tax collected at source  shall be filed with the Income-tax Department in Form 27EQ on a quarterly basis.

 

Quarter	Due Date

 

April- June	15th  July of the Financial Year
July- September	15th  October of the Financial Year
October- December	15th  January of the Financial Year
January- March	15th May  of the financial year  immediately following the financial year in which collection  is made

 

FAQ 30.   What  shall be consequences of non-filing of TCS return?

 

If there  is a delay  in filing  of TCS return, the  late  filing  fee shall  be payable under Section 234E. The fee for default in furnishing the TDS/TCS Statement shall be levied at  the  rate  of Rs. 200 per  day  during which  such  failure  continues. However, the amount of fee shall not exceed  the total amount deductible or collectable, as the case may be. The fee shall be payable before submission of the belated TDS/TCS Statement.

 

If a person fails to file the TCS return or does  not file it by the due  dates,  he shall be liable  to pay  penalty under Section  271H.  The  penalty under Section  271H  is also levied in case of furnishing of inaccurate information under TCS return. The minimum amount  of  penalty  for   failure   to   furnish  TCS  return  or   providing  inaccurate information therein is Rs. 10,000 which  can go up to Rs. 100,000.