TCS applicability on cotton waste
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
07 December 2010
Dear Sir/Madam,
In textile industry when the cotton is used to produce the yarn, some waste from the cotton (such as cotton seeds, small pieces of cotton etc) is througn out of the machinery, which we call it as cotton waste.
Do we need to collect the TCS on sale of such waste.OR we need to collect the form no. 27C
The small peices of cotton througn out of the machine can be directly used by other manufacturere as his raw material.
Thanks in advance
In textile industry when the cotton is used to produce the yarn, some waste from the cotton (such as cotton seeds, small pieces of cotton etc) is througn out of the machinery, which we call it as cotton waste.
Do we need to collect the TCS on sale of such waste.OR we need to collect the form no. 27C
The small peices of cotton througn out of the machine can be directly used by other manufacturere as his raw material.
Thanks in advance
26 July 2025
Great question on TCS for cotton waste! Here’s how it works:
---
### **TCS Applicability on Sale of Cotton Waste**
1. **Is cotton waste considered ‘forest produce’ or any other item attracting TCS under Section 206C?**
* Cotton waste is **not forest produce**.
* It does not fall under specific goods like timber, tendu leaves, or other notified products for TCS under Section 206C(1H) or other clauses.
2. **Therefore, TCS is generally NOT applicable on the sale of cotton waste.**
3. **Form 27C:**
* This form is a **certificate issued by the buyer to the seller** to certify that the goods purchased are for his own use/manufacturing and not for resale.
* It is mainly applicable under certain sections of TCS like on sale of scrap, minerals, etc.
* But since cotton waste is not liable for TCS, Form 27C is not relevant here.
---
### **Summary:**
| Item | TCS Applicability | Form 27C Required? |
| ------------ | ----------------- | ------------------ |
| Cotton waste | No TCS on sale | No |
---
If your client sells cotton waste to other manufacturers for their raw material use, **no TCS needs to be collected**, and no Form 27C is required.
---
If you want, I can also help you draft a note or clause explaining this for your client’s invoices or internal records!
---
### **TCS Applicability on Sale of Cotton Waste**
1. **Is cotton waste considered ‘forest produce’ or any other item attracting TCS under Section 206C?**
* Cotton waste is **not forest produce**.
* It does not fall under specific goods like timber, tendu leaves, or other notified products for TCS under Section 206C(1H) or other clauses.
2. **Therefore, TCS is generally NOT applicable on the sale of cotton waste.**
3. **Form 27C:**
* This form is a **certificate issued by the buyer to the seller** to certify that the goods purchased are for his own use/manufacturing and not for resale.
* It is mainly applicable under certain sections of TCS like on sale of scrap, minerals, etc.
* But since cotton waste is not liable for TCS, Form 27C is not relevant here.
---
### **Summary:**
| Item | TCS Applicability | Form 27C Required? |
| ------------ | ----------------- | ------------------ |
| Cotton waste | No TCS on sale | No |
---
If your client sells cotton waste to other manufacturers for their raw material use, **no TCS needs to be collected**, and no Form 27C is required.
---
If you want, I can also help you draft a note or clause explaining this for your client’s invoices or internal records!
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