TCS ON SALE OF GINNING MACHINERY AS SCRAP
This query is : Resolved
Allauddin Patel
(Querist)
09 August 2026
My question is
Do we need collect tcs if we sell our old ginning machinery as scrap ??
Do we need collect tcs if we sell our old ginning machinery as scrap ??
09 August 2026
TCS is generally NOT required — Section 206C(1) covers scrap arising from manufacturing, and old ginning machinery sold as scrap is a capital asset disposal, not process scrap. Several tribunal rulings support this view.
Caution: It's a litigated/interpretational area — some sellers still collect TCS conservatively if the buyer is a scrap dealer (no real cost to buyer since it's creditable).
If not collecting TCS, keep documentation (asset register, depreciation record, sale authorization) showing it was capital machinery, not manufacturing scrap.
Separately check: Section 194Q (TDS by buyer, if turnover >₹10 cr) and GST on the scrap sale — both are independent compliance points.
Caution: It's a litigated/interpretational area — some sellers still collect TCS conservatively if the buyer is a scrap dealer (no real cost to buyer since it's creditable).
If not collecting TCS, keep documentation (asset register, depreciation record, sale authorization) showing it was capital machinery, not manufacturing scrap.
Separately check: Section 194Q (TDS by buyer, if turnover >₹10 cr) and GST on the scrap sale — both are independent compliance points.
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