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tcs on scrap

Narasimharaju (Article) (28 Points)

21 January 2010

hello sir what is the procedure to collect tcs on scrap can anybody answer me

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3 Replies

Anumanchipalli Sathikonda (Tax Consultant) (1559 Points)
Replied 21 January 2010

Mr.Narasimha Raju

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

Best Wishes

Sathikonda

Deepak Tapse (Accounts Manager - Taxation) (1771 Points)
Replied 22 January 2010

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

Sunil (Trader) (2611 Points)
Replied 22 January 2010

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.

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