Tcs applicability

We are into the business of UPS battery (trading).We buy old batteries from customer and inturn sell them as "SCRAP" to others. Is TCS applicable on such Sale?

Replies (4)

  Seems you are buying old batteries (which are already scraped & not for any use) & you are reselling the scrap.

In my view TCS should be applicable   https://www.exploreincometax.com/Income-tax-Ready-Reckoners/tcs-rates-tcs-compliances

As per Sec. 206C, Every person being a seller will collect TCS either at the time of debiting or receiving payment, whichever is earlier.

Scrap has been defined as follows: 

waste and scrap from the manufacture or mechanical working of materials which is definitely not usable as such because of breakage, cutting up, wear and other reasons.

Thus, the following are not covered—
a. waste or scrap arising from packing materials, newspapers, old machinery scrapped, etc., which cannot be said to arise from manufacture; or
b. by-products generated from the manufacturing process as the same could be used as such.

Also there are few exception in such cases TCS need not to be collected:-

1. No tax will be collected at source from a resident buyer who purchases goods for the purposes of manufacturing, processing or producing any article or thing and not for the purpose of trading.Provided in such case resident buyer gives a declaration in duplicate in Form No. 27C to the seller.

2. buyer is not a public sector company, central govt, state govt, an embassy, high commission

3. buyer has purchased goods for his personal consumption.

So in your case please check, if the buyer is buying for his personal consumption or for purposes of manufacturing and not for trading purpose (Collect form no, 27C), then there is no need to collect TCS, or else the above criteria not fullfilled then you need to collect TCS.

Hello,

I am scrap trader , so I am a applicable for TCS.

 

from which date TCS on Scrap sale is applicable

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