tcs on scrap

Mr.Narasimha Raju

The procedure has been clearly explained in the proviso to section 206C(1), of Income-tax Act, 1961.

Best Wishes

Sathikonda

If you sold scrap worth Rs.100 collect the payment 100 + 1% TCS = 101/-

Agreed with Deepak. However, you bill for 100 + 1 and collect 101. Deposit 1 to Government whether you receive your payment or not. You have to deposit the payment within time limit after billing whether you receive the payment or not in case you follow mercantile system. If you give credit to your customer and he does not pay you, you are still liable to deposit TCS and issue certificate. Moreover, the customer can still claim the Tax Credit and not pay you eventually. In short try and deal on cash and carry or advance payment basis when selling scrap. In case you are having hazardous scrap for which you pay someone to collect and dispose, then TCS is not applicable. In that case it is TDS where you give a disposal contract for the scrap. I think I have answered more than what you wanted to know. However, many people make mistakes that eventually cause a lot of grief to get rectified.