TCS on Sale of Dolochar/Dolachar/Coalchar
This query is : Resolved
CMA Sagar Das
(Querist)
07 August 2024
Please tell me based on any supporting case law/notification that TCS will be applicable on sale of Dolochar/Dolachar/Coalchar or not?
13 August 2025
What Are Dolochar / Coalchar?
These are by-products of sponge iron manufacturing and hence fall under the category of coal or mineral products typically sold or traded.
Are They Subject to TCS?
Yes, but only under certain conditions:
Section 206C(1) of the IT Act mandates TCS at 1% on the sale of specified minerals including coal, lignite, and iron ore.
TaxGuru
TaxHelpDesk
Therefore, if Dolochar qualifies as a coal derivative used for trading purposes, TCS @1% applies unless exemptions are applicable.
TaxHelpDesk
TaxGuru
Exemptions to TCS Collection
You need not collect TCS if:
The buyer is using the product for manufacturing, processing, or production, or
The buyer provides a valid declaration (in the prescribed form).
CAclubindia
TaxHelpDesk
Post-Scrutiny Clarification: “Dolochar”
An Advance Ruling by Karnataka ADRG (No. KAR ADRG 60/2019 dated 20.09.2019) clarified that:
“Dalochar emerges as a by-product in manufacturing of Sponge Iron”
— implying its classification under TCS-liable mineral category.
These are by-products of sponge iron manufacturing and hence fall under the category of coal or mineral products typically sold or traded.
Are They Subject to TCS?
Yes, but only under certain conditions:
Section 206C(1) of the IT Act mandates TCS at 1% on the sale of specified minerals including coal, lignite, and iron ore.
TaxGuru
TaxHelpDesk
Therefore, if Dolochar qualifies as a coal derivative used for trading purposes, TCS @1% applies unless exemptions are applicable.
TaxHelpDesk
TaxGuru
Exemptions to TCS Collection
You need not collect TCS if:
The buyer is using the product for manufacturing, processing, or production, or
The buyer provides a valid declaration (in the prescribed form).
CAclubindia
TaxHelpDesk
Post-Scrutiny Clarification: “Dolochar”
An Advance Ruling by Karnataka ADRG (No. KAR ADRG 60/2019 dated 20.09.2019) clarified that:
“Dalochar emerges as a by-product in manufacturing of Sponge Iron”
— implying its classification under TCS-liable mineral category.
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