Tcs on scrap sale

This query is : Resolved 

02 April 2012

Section 206C of Income Tax States that Tax should be collected on scrap sale. But explanation to sec 206C defines buyer as one who buys scrap in retail trade for personal consumption.

Does it mean that TCS is applicable only if scrap is bought by the buyer for resale.

Further,if sale value of scrap is 100, excise on scrap is 10 and VAT if 5. Then TCS should be collected on 100 or 115.

Please guide.

CA Kishore Tallam (Expert)
03 April 2012

Yes. TCS shall be collected by the seller only if the buyer intention is to trade in such scrap. However, if the buyer gives a declaration saying that scrap is for manufacture, etc., then TCS will not be collected.
TCS shall be collected on amounts debited to buyer account. Hence it shall be collected on total amount including excise and VAT.

03 April 2012

Thank you very much

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
07 April 2012

I agree with the expert

CA Harish Suwalka (Expert)
05 October 2016

If the buyer purchases the specified goods, not for the trading but using for the purpose of production of articles or goods, manufacturing, processing, then no tax will be deducted from that buyer.
The tax is exempted if the buyer gives a declaration for above use, in duplicate in Form 27C to the seller.
The tax is exempted if the seller shall deliver one copy of form 27C from the buyer to the Chief Commissioner/ Commissioner of Income Tax.

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