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!
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Refund Annexure-B
- Sale of Equity shares for Purchase of Residential Property
- Nomination of Bank for refund in itr 2
- Section 56(2) of the Income tax Act 1961 , Gift to relative .
- Liable to deduct tds and 44ADA
- Payment to foreign customer
- TDS PROCEDURE ON SALE OF IMMOVABLE PROPERTY BY NRI
- Non issue of e way bill
- Subscription paid to foreign customer
- Gstr7 vs Gstr3b 2026
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
