TCS

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Solaimalai

Solaimalai (Querist)
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03 December 2009 Whether TCS affected for sale of ATM machine

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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03 December 2009 TCS IS NOT ATTRACTED ON SALES.

Solaimalai

Solaimalai (Querist)
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03 December 2009 TCS applicability for Scrap sale of Machine (it has not been reversed from the Asset A/c)

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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26 July 2025 Regarding **TCS applicability on sale of scrap of a machine**, here’s what you need to know:

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### 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.

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### 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.

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### 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.

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### 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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