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TCS ISSUE


Respected Sir,

One of our suppliers has added 0.10% TCS against the taxable value as follows

Taxable value Rs 1,00,000 ( Rupees One Lacs )
Add TCS @ 0.10% Rs 100 (Rupees One Hundred)
Add IGST 0.10% Concessional Rate Rs 100 (Rupees One Hundred)
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Total Bill Value Rs 1,00,200
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Sales Turnover of the suppliers is above Rs 50 lacs and therefore TDS shall have to be deducted @ 0.10% against taxable purchase value.

TDS shall be paid by the customer after debiting supplier’s account by the TDS amount

Who will pay TCS ? Supplier will recover from us TCS

Supplier will pay TCS or Customer will pay TCS

Please guide me and oblige.







I hope the question was asked keeping in mind section 194Q. Ideally TDS should have been done if the above mentioned TCS is not done under section 206C [except 206C(1H)]. Because it was clarified by CBDT that 194Q has an upper hand over 206C(1H). Hence primary obligation generally rests with the buyer to deduct tax.
Having said that CBDT in it's clarification vide circular 13/2021 dated 30.6.2021 also said that "However, if, for any reason, tax has been collected by the seller under sub-section (I H) of section 206C of the Act, before the buyer could deduct tax under section 194-Q of the Act on the same transaction, such transaction would not be subject to tax deduction again by the buyer. This concession is provided to remove difficulty, since tax rate of deduction and collection are same in section 194Q and sub-section (IH) of section 206C of the Act". So in the given case if the client has already made the payment against the invoice having TCS. Then TDS need not be done again as the supplier himself will be remitting the TCS collected from client. In addition to that the supplier needs to be intimated that in future the client (i.e., the buyer) would do TDS themselves.



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