Tcs on coal sale
This query is : Resolved
18 December 2012
I AM TRADER OF COAL PURCHASE COAL FROM COAL INDIA LTD. SELLER HAVE CHARGED TCS @1% .NOW WE WANT TO SALE THIS COAL ONWORD TO TRADERS .IT IS MENDATORY TO COLLECT TCS FROM OUR BUYER.
OR
ITS NEEDED FOR AUDIT FIRMS ONLY
OR
WE DONT NEED AT A CERTAIN SALE LIMIT
OR
ITS NEEDED FOR AUDIT FIRMS ONLY
OR
WE DONT NEED AT A CERTAIN SALE LIMIT
26 July 2025
Got it! Here’s a clear answer for your **TCS on onward sale of coal as a trader**:
---
### Scenario:
* You **buy coal from Coal India Ltd.** (the original seller) and **they collect TCS @1%** on your purchase.
* Now, you want to **sell this coal to other traders**.
---
### Do you need to collect TCS on your resale of coal?
**No**, you are **not required to collect TCS** on the resale of coal.
---
### Why?
* As per **Section 206C(1)**, TCS @1% on coal is **collected only at the first point of sale** by the **original seller** (e.g., Coal India Ltd).
* The law **exempts buyers who resell the goods** from collecting TCS on subsequent sales.
* So, as a trader **buying from the original seller, you are exempt from collecting TCS when you sell further**.
---
### Is it mandatory only for audit firms or above a certain turnover?
* The TCS obligation on coal sale is **not dependent on turnover or audit status**.
* It applies only to the **first seller** (coal mining companies).
* Subsequent sellers (like you) do **not have any TCS collection liability regardless of sale value**.
---
### Summary:
| Seller Type | TCS Collection on Coal Sale? |
| --------------------------------- | ---------------------------- |
| Original Seller (Coal India Ltd.) | Yes, mandatory @1% |
| Trader Reselling Coal | No, exempt |
---
### In short:
* You **do not have to collect TCS on resale of coal**.
* Only Coal India Ltd. or original coal producers collect TCS on first sale.
---
If you want, I can help draft this as a formal explanation for your buyers or auditors. Want me to do that?
---
### Scenario:
* You **buy coal from Coal India Ltd.** (the original seller) and **they collect TCS @1%** on your purchase.
* Now, you want to **sell this coal to other traders**.
---
### Do you need to collect TCS on your resale of coal?
**No**, you are **not required to collect TCS** on the resale of coal.
---
### Why?
* As per **Section 206C(1)**, TCS @1% on coal is **collected only at the first point of sale** by the **original seller** (e.g., Coal India Ltd).
* The law **exempts buyers who resell the goods** from collecting TCS on subsequent sales.
* So, as a trader **buying from the original seller, you are exempt from collecting TCS when you sell further**.
---
### Is it mandatory only for audit firms or above a certain turnover?
* The TCS obligation on coal sale is **not dependent on turnover or audit status**.
* It applies only to the **first seller** (coal mining companies).
* Subsequent sellers (like you) do **not have any TCS collection liability regardless of sale value**.
---
### Summary:
| Seller Type | TCS Collection on Coal Sale? |
| --------------------------------- | ---------------------------- |
| Original Seller (Coal India Ltd.) | Yes, mandatory @1% |
| Trader Reselling Coal | No, exempt |
---
### In short:
* You **do not have to collect TCS on resale of coal**.
* Only Coal India Ltd. or original coal producers collect TCS on first sale.
---
If you want, I can help draft this as a formal explanation for your buyers or auditors. Want me to do that?
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