TCS
This query is : Resolved
03 December 2009
Whether TCS affected for sale of ATM machine
03 December 2009
TCS IS NOT ATTRACTED ON SALES.
03 December 2009
TCS applicability for Scrap sale of Machine (it has not been reversed from the Asset A/c)
26 July 2025
Regarding **TCS applicability on sale of scrap of a machine**, here’s what you need to know:
---
### 1. **TCS Applicability on Sale of Scrap**
* Under **Section 206C(1H)** (introduced from 1 October 2020), TCS @ 0.1% (or 1% earlier for certain scrap) is applicable on sale of goods, including scrap, if:
* The **total sale consideration in a financial year exceeds ₹50 lakh**.
* The buyer is **liable to deduct TDS under any section** (e.g., a company or a person deducting TDS).
* Earlier, **Section 206C(1)(ix)** mandated TCS @1% on sale of scrap by the seller.
* **So, if the seller is a registered person (e.g., company) selling scrap, TCS @1% is applicable on scrap sales** irrespective of whether the scrap amount has been written off or not from Asset account.
---
### 2. **Whether TCS is to be collected even if scrap sale value is not written off**
* Yes, TCS is applicable on **actual sale proceeds** received from sale of scrap, regardless of whether the asset account has been written off or not.
* Accounting treatment (writing off asset or not) does not affect tax liability to collect TCS.
---
### 3. **Practical Implication**
* If your company sells scrap machine parts or scrap material exceeding ₹50 lakh in aggregate in a year, it must collect TCS @1% on scrap sales from the buyer.
* TCS collected should be deposited with the government and reflected in Form 26AS for the buyer.
---
### 4. **Summary**
| Aspect | Explanation |
| --------------------------- | ------------------------------------------------ |
| TCS Applicability | Yes, on scrap sale exceeding ₹50 lakh/year |
| Rate | 1% (earlier) or 0.1% (Section 206C(1H)) |
| Accounting write-off impact | No impact; TCS applies on actual sale value |
| Compliance | Must collect TCS, deposit, and issue certificate |
---
---
### 1. **TCS Applicability on Sale of Scrap**
* Under **Section 206C(1H)** (introduced from 1 October 2020), TCS @ 0.1% (or 1% earlier for certain scrap) is applicable on sale of goods, including scrap, if:
* The **total sale consideration in a financial year exceeds ₹50 lakh**.
* The buyer is **liable to deduct TDS under any section** (e.g., a company or a person deducting TDS).
* Earlier, **Section 206C(1)(ix)** mandated TCS @1% on sale of scrap by the seller.
* **So, if the seller is a registered person (e.g., company) selling scrap, TCS @1% is applicable on scrap sales** irrespective of whether the scrap amount has been written off or not from Asset account.
---
### 2. **Whether TCS is to be collected even if scrap sale value is not written off**
* Yes, TCS is applicable on **actual sale proceeds** received from sale of scrap, regardless of whether the asset account has been written off or not.
* Accounting treatment (writing off asset or not) does not affect tax liability to collect TCS.
---
### 3. **Practical Implication**
* If your company sells scrap machine parts or scrap material exceeding ₹50 lakh in aggregate in a year, it must collect TCS @1% on scrap sales from the buyer.
* TCS collected should be deposited with the government and reflected in Form 26AS for the buyer.
---
### 4. **Summary**
| Aspect | Explanation |
| --------------------------- | ------------------------------------------------ |
| TCS Applicability | Yes, on scrap sale exceeding ₹50 lakh/year |
| Rate | 1% (earlier) or 0.1% (Section 206C(1H)) |
| Accounting write-off impact | No impact; TCS applies on actual sale value |
| Compliance | Must collect TCS, deposit, and issue certificate |
---
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