TDS on purchase - 194 Q /TCS on sale of goods 206 ( 1 h)

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VARMA (Querist)
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13 August 2021 Dear experts,
I need advise on below :
1. if my supplier add TCS in his invoice after july 2021, TDS deduction on purchase above 50 lk is is compulsory ?
2. if TDS is not deducted, whether expenses will get disallow.
advise

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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13 August 2021 1 yes, it's compulsory deduct TDS and don't pay for TCS.
2 yes, it will be disallowed.

VARMA

VARMA (Querist)
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16 August 2021 Please advise on below
extract from clarification issued by CBDT vide circular 13/2021 dated 30.6.2021

which says that for any reason if buyer failed to deduct TDS u/s 194Q then seller can collect tax u/s 206C(1H): If a transaction is both within the purview of section 194-Q of the Act as well as sub-section (I H) of section 206C of the Act, the tax is required to be deducted under section 194-Q of the Act.

The transaction shall come out of the purview of sub-section (1 H) of section 206C of the Act after tax has been deducted by the buyer on that transaction. Once the buyer has deducted the tax on a transaction, the seller is not required to collect the tax under sub-section (I H) of section 206C of the Act on the same transaction.

However, if, for any reason, tax has been collected by the seller under sub-section (I H) of section 206C of the Act, before the buyer could deduct tax under section 194-Q of the Act on the same transaction, such transaction would not be subjected to tax deduction again by the buyer. This concession is provided to remove difficulty, since tax rate of deduction and collection are same in section 194Q and sub-section (IH) of section 206C of the Act

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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16 August 2021 Yes, follow the clarification given above.

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TDS on purchase - 194 Q /TCS on sale of goods 206 ( 1 h)

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