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TCS on scrap sale

Vishal Mhaske (service) (30 Points)

04 September 2010

My client is branch of consumer product manufacturing company like mixer,iron etc.

Defective material returned by customers at branch is sold by branch as scrap.

Is branch is required to collect TCS ?

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7 Replies

CA Navin Jain (MANAGER (FINANCE & ACCOUNTS)) (11768 Points)
Replied 04 September 2010

TCS

TCS would be appilicabe on the sale of scrap but there is exemption limit if following condition is satisfied

No tax will be deducted from a buyer who purchases specified goods not for the purpose of trading but for the manufacturing,processing,or production of goods/article or thing.
In this case Buyer gives a declaration, for above use, in duplicate in Form 27C to the seller.

Vijay gandhi (consultant) (567 Points)
Replied 04 September 2010

If scrap is sold to trader than tds is applicable....

CA Navin Jain (MANAGER (FINANCE & ACCOUNTS)) (11768 Points)
Replied 04 September 2010

YES TCS SHALL BE APPLICABLE IF ITS SOLD TO TRADER, NO EXEMPTION FOR TRADER

Vishal Mhaske (service) (30 Points)
Replied 04 September 2010

Thanka Navin & Vijay.

Dear Navin

Branch is not purchasing any specialised items.The Items like mixer,irons are transferred from manufacturing unit to branch under branch transfer and branch sells to the customer.

Defectives are customer returned material which branch sell as scrap .The contention of branch finance manager is that Sec.206(c) is not applicable to him as scrap is not generating out of manfacturing process and manufacturing process is already completed.

So is branch finance manager's contention correct ?

I am of the opinon is that TCS should be collected as branch is nothing but extended hand of manufacturing unit and defectives which are sold are dismentled totally and sold as scrap so that it cannot be used further.

Please suggest me the correct procedure.

Kalpesh Chauhan, (Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com)) (8310 Points)
Replied 04 September 2010

Originally posted by : CA Navin Jain
	TCS TCS would be appilicabe on the sale of scrap but there is exemption limit if following condition is satisfied No tax will be deducted from a buyer who purchases specified goods not for the purpose of trading but for the manufacturing,processing,or production of goods/article or thing. In this case Buyer gives a declaration, for above use, in duplicate in Form 27C to the seller.

Thanks Mr.Nvain

CA Navin Jain (MANAGER (FINANCE & ACCOUNTS)) (11768 Points)
Replied 04 September 2010

yes, branch mamanger is right

1 Like

halaswamy k m (ACCOUNTS MANAGER) (21 Points)
Replied 30 November 2012

We are manufacturing of chemical products we are going to sale some waste plastic barral and other scraps to traders .

shall we charge any TCS? . what is the limit ?. which department shall we make the payment either income tax or VAt dept what are all the form shall we fill

Please healp me