TCS/TDS on sale/ purchase

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This discussion clarifies who is responsible for TCS (Tax Collected at Source) and TDS (Tax Deducted at Source) when buying or selling goods. Generally, the buyer is liable to deduct TDS under Section 194Q if they purchase goods exceeding ₹50 lakhs in a financial year and meet certain turnover criteria. However, if neither party has complied, the responsibility ultimately falls on the seller to collect TCS or the buyer to deduct TDS, depending on the specific transaction and applicable tax laws.

Smrity

Smrity (Querist)
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27 July 2023 Hello All,

Whether the onus of TCS/TDS on sale/purchase of goods lies on the Seller or Buyer.

Need advice

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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27 July 2023 Applicability of provisions of Section 194Q of the Income Tax Act ::
The purchaser of the goods satisfying the following conditions is liable to deduct TDS under section 194Q –
1. Purchaser is responsible for paying a sum to any resident seller for the purchase of any goods;
2. Value/ aggregate value is more than INR 50 Lakhs in the Financial Year; and
3. Total sales/ gross receipts/ turnover of the purchaser is more than INR 10 crores in the immediately preceding Financial Year.

The provision will not be applicable if tax is collectable under any of the provisions of section 206C of the Income Tax Act [other than section 206C(1H)].

Smrity

Smrity (Querist)
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28 July 2023 Actually Sir, neither the Seller has charged the TCS nor has the Purchaser deducted the TDS .
in such case the onus/responsibility lies on the Seller or the Purchaser

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 July 2023 What is the nature of transaction? Whether liability of TCS is applicable under the act?
If no, then purchaser is responsible to deduct TDS, if liable.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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12 September 2024 Good Luck.

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