Quick Summary
There are reports in certain sections of media wherein certain doubts have been raised regarding the applicability of the provisions relating to Tax Collection at Source (TCS) on certain goods introduced vide Finance Act, 2020. This press note is being issued to clarify those doubts about the applic
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FAQ :
TCS is applicable on the sale of goods where the total sale consideration received from a buyer exceeds Rs. 50 lakh in a financial year. This applies to amounts received on or after 1st October 2020.
Only sellers whose business turnover exceeded Rs. 10 crore in the preceding financial year are required to collect TCS. Sellers with a turnover of less than Rs. 10 crore are exempt.
No, TCS is only applicable to the sale consideration received on or after 1st October 2020. Amounts received before this date are not subject to TCS.
No, TCS is not an additional tax. It is in the nature of advance income tax or TDS, and the buyer can claim credit for the TCS amount against their actual income tax liability.
No, the export of goods has been exempted from the applicability of these TCS provisions.
The Rs. 50 lakh threshold is calculated based on the total receipts from a buyer from the beginning of the financial year (1st April 2020) up to the point of sale consideration received on or after 1st October 2020.
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