SECTION 206C(1H) QUERY

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This discussion clarifies the applicability of Tax Collected at Source (TCS) under Section 206C(1H) for the sale of goods. The core question is whether TCS is levied on the total sale amount or only the amount actually received, especially when part of the balance is adjusted against purchases. The consensus suggests TCS is applicable on the actual receipts exceeding the threshold, meaning if ₹1.5 Crore was received and ₹50 Lakhs was adjusted against purchases, TCS would be calculated on the ₹1.5 Crore if it exceeds the ₹50 Lakh threshold.

Gagandeeo singh

Gagandeeo singh (Querist)
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14 April 2021 Opening balance of a debtor (for sale of good) was 2 Crores. He paid 1.5 Crore by RTGS and balance 50 Lakhs amount was adjusted on account of purchases made by us worth 50 Lakhs.

Question:
On what amount am i liable to collect TCS U/s 206C(1H) 1.5 Crore or 2.0 Crore?

Gokul Sharma

Gokul Sharma (Expert)
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14 April 2021 2 CRORE WHICH IS YOUR SALE AMOUNT.

CMA Poornima Madhava

CMA Poornima Madhava (Expert)
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14 April 2021 TCS u/s 206C(1H) is applicable on the value of total receipts which is in excess of the threshold limit of ₹50 lacs. In this case, if the total receipts (including book adjustments) during the year are ₹2 cr, tax to be collected at source on ₹1.5cr.

Tarak Shah

Tarak Shah (Expert)
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14 April 2021 TCS provision is applicable on the amount of Receipt in excess of Rs. 50 lakhs. So in your case, according to me you had received Rs. 1.5 cr. balance is adjusted against the purchase. So TCS to be collected only on 1.5 Cr. which is received.

Susmita Dutta, CA , CPA

Susmita Dutta, CA , CPA (Expert)
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14 April 2021 The sales consideration is RS. 2crores ,according to Section 206C(1H) the seller requires to collect TCS over and above the sale amount of Rs.50 lakhs....the TCS will be on surplus amount of the total transaction, which is 1.5 crores.

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