1) When we issue invoice for Rs. 3.00 Lacs & against this invoice we received chq. of Rs. 2.90 Lacs & balance received in cash of Rs. 0.10 lacs. Provision of TCS shall be applicable or not.
2) Some of our parties directly deposit cash in our bank account below Rs. 50,000/- each transaction & we issue the invoice against each transaction. Provision of TCS shall be applicable or not.
05 June 2016
Dear Rakesh, below are clarification hope you can find your answer.
w.e.f 01.06.2016, if payment consideration (or any part of it) is received in cash of sale of ANY goods/ provision of any service (exceeding Rs. 2. lac), TCS @ 1% should be deducted.
If any part amount is received in cash (even a small sum of say Rs. 100) against a Single Invoice of Rs. 2 Lakh or more, towards sale of goods or services (except in case of jewellery where this limit is 5 lakh) then 1% TCS has to be collected from customer.
Further in case of sale of car exceeding Rs. 10 Lakh either in cash or cheque 1% TCS will be collected.
If single party is having multiple bills each less than 2 Lakh, then any amount collected in cash will not be liable to TCS.
If any payment is liable to TDS, then there will be no TCS under this section for the same payment.
If seller is state and central government department, any company, firm or individual or HUF liable to Tax Audit, then they are liable to collect TCS.
Example MR Rakesh purchases goods from distributor for Rs. 8.00 lac on 10.06.2016, payment of Rs. 795000/- has been made by cheque on 11.06.2016, balance 5000/- has been paid in Cash on 12.06.2016. Please note that Seller has to collect TCS @ 1% on Rs. 800000/- (i.e. Rs. 8000/-). This TCS is applicable regardless of the fact whether Rakesh is dealer in goods or Rakesh purchased for his personal consumption.
In Short, it means no cash payment to be made even in part against Single Bill exceeding 2 Lacs, otherwise Seller to deduct TCS. Or clients better to prefer each bill below Rs. 2 Lacs
In Your Case: (1) TCS will be deducted on fully amount of Rs 3 lac not only on 0.10 Lac. Be Careful to deduct TCS. (2) TCS will not attract on these type of transactions. Coz only transaction with more than or equal to 2 lac will attract TCS if any part of these transactions will be paid in CASH.
CAclubindia
