Applicability of tcs u/s 206(c) (Income Tax)

This query is : Resolved

Author : Anonymous

( Author )
06 July 2012

I am trader of iron & steel scrap and do all the purchases from Manufacturers after paying TCS, I further sell this material to manufacturers.

My question is whether I am Liable to Charge TCS keeping in mind that I am Trader & all my purchases are after paying TCS, Since I have not obtained any Form 27C

My second question is whether this is a multi Point tax or just levied at souces i.e. Manufacturers.

CA Navin Jain

( Expert )
06 July 2012

you are not liable to charge the TCS

Author : Anonymous

( Author )
06 July 2012

Please reply sir, How I am emempted from chrging TCS.

If Possible please provide the ruling as well

CA Navin Jain

( Expert )
06 July 2012

TCS IS APPLICABLE ON THE SCRAP GENERATED THROUGH MANUFACTURING,

Hence you are not a manufacture, you are a trader therefore ypu are not liable to charge tcs.

Author : Anonymous

( Author )
06 July 2012

But, under which section are traders exempted

CA CS Amit S. Kedia

( Expert )
06 July 2012

Traders are also liable for TCS u/s 206C. exemption is avalailable only to those traders who sell the scraps to retail purchasers for personal consumption.

CA CS Amit S. Kedia

( Expert )
06 July 2012

Section 206C is applicable to every seller whether it is manufacture or it is a trader.
But What you are selling as scrap is very important to look at, because only scrap arising from manufacturing activity is liable for TCS.

It is also pertinent to look at the heading of the section which uses the words " business of trading in..".

Author : Anonymous

( Author )
06 July 2012

Dear Kedia Sir,

I have been dealing in only scraps generated from Manufacturing process, I have been paying TCS on all my purchases, but Am I liable to charge TCS on my sale as well.

CA CS Amit S. Kedia

( Expert )
06 July 2012

Yes.. you will have to collect from the buyers and pay to the government as I said in my earlier reply.