We have a debtor from which we have received total Rs. 55Lakhs. Out of these receipts 35Lakhs relates to FY 19-20 and balance related to sale of current year. Total Sale in current year to this party is 22Lakhs. and final closing balance of debtor is 2lakhs (35+22-55).
Whether tds Sec206C(1H) will be applicable on receipt exceeding Rs. 50Lakhs in this case. As although limit of 50lakhs is exceeding but out of this 35lakhs is not related to sale made in FY 20-21.
If we consider turnover, then TCS u/s 206C(1H) will not be applicable. But no such clarification is issued till yet for such cases of receipts related to past years sales, on which TCS under this provision should not be applicable. As per CBDT Circular No. 17/2020 dated 29.09.2020 "Since sub-section (1H) of section 206C of the Act applies on receipt of sale consideration, the provision of this sub-section shall apply on all sale considerations (including advance received for sale) received on or after 1st October 2020 even if the sale was carried out before 1st October 2020" this wording is written. But whether sale carried before 1 Oct 2020 will include even past years sales also, if yes then law making authority should not have such intention on applying provisions indirectly on cases related to past years in which period this section 206C(1H) was not implemented.
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