TCS ON SALE OF GOODS SEC 206C(1H)

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This discussion clarifies the application of TCS under Section 206C(1H) on the sale of goods. The core question is whether TCS should be collected on the total sale value (Rs. 2 crores) or only on the amount received exceeding Rs. 50 lakhs (Rs. 20 lakhs in this case), considering a book adjustment. The consensus is that TCS is applicable on the entire Rs. 2 crores, as book adjustments are considered a form of receipt for this purpose.

K BHEEMA REDDY

K BHEEMA REDDY (Querist)

27 October 2020 Dear sir,
I have one doubt regarding TCS on sale of goods. Our company ABC ltd sell the goods in oct'2020
Rs.2 crores to XYZ ltd.. and XYZ ltd sell the goods to ABC Ltd Rs. 1.8 crores . in this case XYZ ltd set off payable amount against Receivable amount Rs 1.8 Crores, and Balance amount Received From XYZ ltd is Rs 20 lakhs.
In this case TCS Should be collected on what amount by ABC Ltd.
1) Whether it should be colleted on entire Rs 2 crores ..?
or
2) It should be collected on only Rs 20 Lakhs...?
3) whether TCS provision is applicable or not (Because amount received is below 50 Lakhs upto oct'2020)

Please Reply me as soon as possible.

Thanks in advance,
Regards,
Bheema Reddy.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

27 October 2020 TCS should be colleted on entire Rs 2 crores

K BHEEMA REDDY

K BHEEMA REDDY (Querist)

28 October 2020 Dear sir,
Thank u for your previous reply,
sir in our company TCS is collected on sale consideration received in excess of 50 Lakhs by raising Debit note (for TCS amount), but not on sale invoice, Because sec 206C (IH) says TCS should be collected on sale consideration received inexcess of 50 Lakhs.. In this case we have received consideration amount only 20 lakhs but not 2crores. in this case tcs should be collect on what amount..?

Please reply me sir,
Thanks in advance
Regards,
Bheema Reddy.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

28 October 2020 Book adjustment also considered as receipt.

K BHEEMA REDDY

K BHEEMA REDDY (Querist)

30 October 2020 Thank u sir for your valuable reply.