Tcs on sale of minerals coal & ignite
This query is : Resolved
Arpita Toshniwal
(Querist)
11 February 2013
One of our client is dealing in purchase and sale of minerals coals etc.As per Provisions TCS is collected by seller now my doubt is whether the trader has to collect tax again from it buyers or not? as the original seller has collected the tax.
11 February 2013
Dear Ekta,
since the Toll charges have been separately disclosed, ST, in my opinion, need not be paid..
this is so, since it is not a part of the value of service provided...
since the Toll charges have been separately disclosed, ST, in my opinion, need not be paid..
this is so, since it is not a part of the value of service provided...
11 February 2013
Sorry for the confusion...actually i was answering another query and posted it here by mistake...
Arpita Toshniwal
(Querist)
20 February 2013
Please reply to my query...its very urgent....please reply as soon as possibe.thanks in advance.
26 July 2025
Hey! About TCS on sale of minerals like coal and lignite, here’s the clear picture:
---
### TCS Applicability on Coal, Lignite, and Minerals (under Section 206C(1)):
* **The seller** (like Coal India or original miner) is required to collect TCS @1% at the **first point of sale** (when minerals are sold for the first time).
* According to the Income Tax Act and clarifications, **subsequent buyers or traders do NOT have to collect TCS again** when they resell these minerals.
* This means only the original seller (mining company or government agency) is responsible for collecting TCS on first sale.
* Buyers who purchase for resale are **exempt from collecting TCS** on further sales.
---
### So for your client (a trader):
* If your client is buying coal or lignite from the original seller who already collected TCS, your client **does NOT need to collect TCS from his buyers on resale** of the same minerals.
* Your client should keep documentary evidence (like purchase invoices showing TCS paid) to prove this during assessments or audits.
---
If you want, I can share relevant circulars or sections that confirm this. Would you like that?
---
### TCS Applicability on Coal, Lignite, and Minerals (under Section 206C(1)):
* **The seller** (like Coal India or original miner) is required to collect TCS @1% at the **first point of sale** (when minerals are sold for the first time).
* According to the Income Tax Act and clarifications, **subsequent buyers or traders do NOT have to collect TCS again** when they resell these minerals.
* This means only the original seller (mining company or government agency) is responsible for collecting TCS on first sale.
* Buyers who purchase for resale are **exempt from collecting TCS** on further sales.
---
### So for your client (a trader):
* If your client is buying coal or lignite from the original seller who already collected TCS, your client **does NOT need to collect TCS from his buyers on resale** of the same minerals.
* Your client should keep documentary evidence (like purchase invoices showing TCS paid) to prove this during assessments or audits.
---
If you want, I can share relevant circulars or sections that confirm this. Would you like that?
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