In this Presentation 헗헿. 헩헶헻헼헱 헞. 헦헶헻헴헵헮헻헶헮 has shared an Overview on "TCS under section 206C (1H)" Topics Covered in this Presentation : 1. Who is liable to collect tax at the source? A. “Seller” is required to collect tax at the source. 2. From whom tax is to be collected A. Tax is required to be collected from buyers of goods. 3. Time of tax collection at source 4. Rate of TCS 5. When TCS is not required 6. Lower/nil TCS certificate 7. A few clarifications 8. Case-studies

1. TCS under section 206C(1H)
An overviewAn overview
by
Dr. Vinod K. Singhania

2. Who is liable to collect tax at sourceWho is liable to collect tax at source
“Seller” is required to collect tax at Seller is required to collect tax at
source.
©Vinod K. Singhania

3. Who is liable to collect tax at sourceWho is liable to collect tax at source
“Seller” is required to collect tax at Seller is required to collect tax at
source.
Who is seller
1. Turnover - His turnover
in the immediately
Individual, HUF,
firm company copreceding financial year
is more than Rs. 10 crore.
2. Negative list - Central
Government or any
Turnover
- Domestic sale
- Sale in overseas market
firm, company, co-
operative society
artificial juridical
person, AOP, BOP,Government or any
person notified by the
Government.
- Of goods and services
person, AOP, BOP,
©Vinod K. Singhania

4. From whom tax is to be collectedFrom whom tax is to be collected
Tax is required to be collected from buyerTax is required to be collected from buyer
of goods.
©Vinod K. Singhania

5. From whom tax is to be collectedFrom whom tax is to be collected
Tax is required to be collected from buyerTax is required to be collected from buyer
of goods.
 A person who purchases goods from seller
 Negative list –
- (a) Central Government, State Government, an embassy, a
High Commission, legation, commission, consulate and the
trade representation of a foreign State, or
- (b) local authority, or
- (c) a person importing goods into India, or
©Vinod K. Singhania
p p g g
- (d) any other person as notified by the Central Government.

6. From whom tax is to be collectedFrom whom tax is to be collected
Tax is required to be collected from buyerTax is required to be collected from buyer
of goods.
 Immovable property is not “goods”.
 b Any movable property, commodity, shares/securities,
agriculture produce, fuel, electricity, liquor,
jewellery/bullion, peace of art/drawings, scraps, forest
produce.
 But if tax is deducted/collected under any other provision
by buyer or seller, section 206C(1H) TCS is not applicable.
©Vinod K. Singhania
y y , ( ) pp

7. Time of tax collection at source
Tax is to be collected by seller at the timeTax is to be collected by seller at the time
of receipt of sale consideration exceeding
Rs 50 lakh (in a financial year) from aRs. 50 lakh (in a financial year) from a
buyer.
©Vinod K. Singhania

8. Time of tax collection at source
Tax is to be collected by seller at the timeTax is to be collected by seller at the time
of receipt of sale consideration exceeding
Rs 50 lakh (in a financial year) from aRs. 50 lakh (in a financial year) from a
buyer.
B t t ll ti i i d l iBut tax collection is required only in
respect of sale consideration received on
ft O t b 1 2020 ( TCS tor after October 1, 2020 (no TCS up to
September 30, 2020).
©Vinod K. Singhania

9. Time of tax collection at source
Tax is to be collected by seller at the time
Different
cases
Seller Buyer Sale consideration received by seller from buyer
of goods during the financial year 2020-21
Whether TCS is
required under
Tax is to be collected by seller at the time
of receipt of sale consideration exceeding
Rs 50 lakh (in a financial year) from a
cases of goods during the financial year 2020 21 required under
section
206C(1H)
Up to September
30, 2020
From October
1, 2020
Total
Case 1 A Ltd. X Rs. 10 lakh Rs. 30 lakh Rs. 40 lakh No TCS
Rs. 50 lakh (in a financial year) from a
buyer.
B t t ll ti i i d l i
Case 2 B Ltd. Y Ltd. Rs. 40 lakh Rs. 20 lakh Rs. 60 lakh TCS on Rs. 10
lakh
Case 3 C Ltd. Z Ltd. Rs. 60 lakh Rs. 20 lakh Rs. 80 lakh TCS on Rs. 20
But tax collection is required only in
respect of sale consideration received on
ft O t b 1 2020 ( TCS t
Case 3 C Ltd. Z Ltd. Rs. 60 lakh Rs. 20 lakh Rs. 80 lakh TCS on Rs. 20
lakh
Case 4 D Ltd. A LLP Nil Rs. 80 lakh Rs. 80 lakh TCS on Rs. 30
lakh
or after October 1, 2020 (no TCS up to
September 30, 2020).
TCS required only
if turnover of seller
for financial year
i
©Vinod K. Singhania
2019-20 is more
than Rs. 10 crore

10. Rate of TCS
Rate of TCS is 0 1% (0 075% duringRate of TCS is 0.1% (0.075% during
October 1, 2020 and March 31, 2021).
I PAN it i 1% (i PANIn no PAN case, it is 1% (in no PAN case,
no concession during October 1, 2020 and
M h 31 2021)March 31, 2021).
©Vinod K. Singhania

11. When TCS is not requiredq
 Sale consideration received before October 1, 2020.,
 If sale consideration (or agreed sale consideration)
received from a seller does not exceed Rs. 50 lakh.
 If turnover of the seller in the preceding financial year is
Rs. 10 crore or less.
 If ll d If seller exports goods.
 Sale consideration pertaining to supply of services.
 If b i li bl t TDS d i i d If buyer is liable to TDS under any provision and
tax is deducted by buyer.
 If goods are covered by TCS provisions of section
©Vinod K. Singhania
 If goods are covered by TCS provisions of section
206C(1)/(1F)/(1G).

12. Lower/nil TCS certificate
Not possible.
©Vinod K. Singhania

13. A few clarifications
 Circular No. 17/2020, dated September 20, 2020.
 GST is part of sale consideration.
 Advance receipt of sale consideration is subject to
TCS.
 Advance received before October 1, 2020 but sale
of goods on or after October 2020.
 S l f d b f O b 1 2020 b Sale of goods before October 1, 2020 but
consideration received on or after October 1, 2020.
©Vinod K. Singhania

14. A few clarifications
 Circular No. 17/2020, dated September 20, 2020.
 No adjustment on account of sale return or
di i di i l di GST idiscount or indirect taxes including GST is
required to be made for TCS section 206C(1H)
since the collection is made with reference tosince the collection is made with reference to
receipt of amount of sale consideration.
©Vinod K. Singhania

15. Case StudyCase Study
Seller : X Ltd., buyer : A Ltd.
Invoice No. Invoice Invoice Invoice No.
Seller : X Ltd., buyer : A Ltd.
(Invoices issued by X Ltd. to A Ltd. during financial year 2020-21)
15 No. 36 No. 105 584
Rs. Rs. Rs. Rs.
MRP 38,20,000 30,90,000 70,00,000 1,30,00,000
L Di / h di /Less: Discount/cash discount/
trade discount as per invoice 20,000 3,09,000 70,000 13,00,000
Balance 38,00,000 27,81,000 69,30,000 1,17,00,000
Add: GST 2 28 000 5 00 580 8 31 600 21 06 000Add: GST 2,28,000 5,00,580 8,31,600 21,06,000
Total 40,28,000 32,81,580 77,61,600 1,38,06,000
©Vinod K. Singhania

16. Date Details A Ltd.
Dr Cr Total
Rs. Rs. Rs.
April 1, 2020 Opening balance 39,06,000 – 39,06,000
July 2, 2020 Goods sold/Invoice No. 15
August 16, 2020 Goods sold/Invoice No. 36
August 17, 2020 Defective goods return pertaining to
Invoice No 15 (GST Credit Note to beInvoice No. 15 (GST Credit Note to be
issued)
September 18, 2020 NEFT of Rs. 5 lakh by A Ltd.
October 6, 2020 Goods sold/Invoice No. 105
October 8, 2020 NEFT of Rs. 80 lakh by A Ltd.
November 7, 2020 TCS deposited
November 12, 2020 NEFT of Rs. 60 lakh by A Ltd.
December 7, 2020 TCS deposited
December 28, 2020 Goods sold/ Invoice No. 584
February 12, 2021 NEFT of Rs. 95 lakh by A Ltd.eb u y , 0 N o s. 95 by d.
March 7, 2021 TCS deposited
March 31, 2021 Balance c/d
April 1, 2021 Balance b/d
©Vinod K. Singhania
p ,
April 15, 2021 NEFT of Rs. 70 lakh (for part payment
of outstanding amount + advance of
Rs. 40 lakh)
May 7, 2021 TCS deposited

17. A few clarifications
Date Details A Ltd.
Dr Cr Total
Rs. Rs. Rs.
April 1, 2020 Opening balance 39,06,000 – 39,06,000
July 2, 2020 Goods sold/Invoice No. 15
40,28,000
August 16, 2020 Goods sold/Invoice No. 36
32,81,580
August 17, 2020 Defective goods return pertaining to
Invoice No 15 (GST Credit Note to beInvoice No. 15 (GST Credit Note to be
issued) –
September 18, 2020 NEFT of Rs. 5 lakh by A Ltd.
–
October 6, 2020 Goods sold/Invoice No. 105
77,61,600, ,
October 8, 2020 NEFT of Rs. 80 lakh by A Ltd.
–
November 7, 2020 TCS deposited
–
November 12, 2020 NEFT of Rs. 60 lakh by A Ltd.
–
December 7, 2020 TCS deposited
–
December 28, 2020 Goods sold/ Invoice No. 584
1,38,06,000
February 12, 2021 NEFT of Rs. 95 lakh by A Ltd.y , y
–
March 7, 2021 TCS deposited –
March 31, 2021 Balance c/d
–
April 1, 2021 Balance b/d –
©Vinod K. Singhania
p –
April 15, 2021 NEFT of Rs. 70 lakh (for part payment
of outstanding amount + advance of
Rs. 40 lakh) –
May 7, 2021 TCS deposited –

18. A few clarifications
Date Details A Ltd.
Dr Cr Total
Rs. Rs. Rs.
April 1, 2020 Opening balance 39,06,000 – 39,06,000
July 2, 2020 Goods sold/Invoice No. 15
40,28,000 – 79,34,000
August 16, 2020 Goods sold/Invoice No. 36
32,81,580 – 1,12,15,580
August 17, 2020 Defective goods return pertaining to
Invoice No 15 (GST Credit Note to beInvoice No. 15 (GST Credit Note to be
issued) – 14,10,000 98,05,580
September 18, 2020 NEFT of Rs. 5 lakh by A Ltd.
–
October 6, 2020 Goods sold/Invoice No. 105
77,61,600, ,
October 8, 2020 NEFT of Rs. 80 lakh by A Ltd.
–
November 7, 2020 TCS deposited
–
November 12, 2020 NEFT of Rs. 60 lakh by A Ltd.
–
December 7, 2020 TCS deposited
–
December 28, 2020 Goods sold/ Invoice No. 584
1,38,06,000
February 12, 2021 NEFT of Rs. 95 lakh by A Ltd.y , y
–
March 7, 2021 TCS deposited –
March 31, 2021 Balance c/d
–
April 1, 2021 Balance b/d –
©Vinod K. Singhania
p –
April 15, 2021 NEFT of Rs. 70 lakh (for part payment
of outstanding amount + advance of
Rs. 40 lakh) –
May 7, 2021 TCS deposited –

19. A few clarifications
Date Details A Ltd.
Dr Cr Total
Rs. Rs. Rs.
April 1, 2020 Opening balance 39,06,000 – 39,06,000
July 2, 2020 Goods sold/Invoice No. 15
40,28,000 – 79,34,000
August 16, 2020 Goods sold/Invoice No. 36
32,81,580 – 1,12,15,580
August 17, 2020 Defective goods return pertaining to
Invoice No 15 (GST Credit Note to beInvoice No. 15 (GST Credit Note to be
issued) – 14,10,000 98,05,580
September 18, 2020 NEFT of Rs. 5 lakh by A Ltd.
–
October 6, 2020 Goods sold/Invoice No. 105
77,61,600
5,00,000 93,05,580
– 1,70,67,180, ,
October 8, 2020 NEFT of Rs. 80 lakh by A Ltd.
–
November 7, 2020 TCS deposited
–
November 12, 2020 NEFT of Rs. 60 lakh by A Ltd.
79,97,377 90,69,803
–
December 7, 2020 TCS deposited
–
December 28, 2020 Goods sold/ Invoice No. 584
1,38,06,000
February 12, 2021 NEFT of Rs. 95 lakh by A Ltd.
Receipt of sale
considerationy , y
–
March 7, 2021 TCS deposited –
March 31, 2021 Balance c/d
–
April 1, 2021 Balance b/d –
consideration
35 lakh × 100
100 + t
45 lakh +
©Vinod K. Singhania
p –
April 15, 2021 NEFT of Rs. 70 lakh (for part payment
of outstanding amount + advance of
Rs. 40 lakh) –
May 7, 2021 TCS deposited –
t = 0.075

20. A few clarifications
Date Details A Ltd.
Dr Cr Total
Rs. Rs. Rs.
April 1, 2020 Opening balance 39,06,000 – 39,06,000
TCS
Rs.
July 2, 2020 Goods sold/Invoice No. 15
40,28,000 – 79,34,000
August 16, 2020 Goods sold/Invoice No. 36
32,81,580 – 1,12,15,580
August 17, 2020 Defective goods return pertaining to
Invoice No 15 (GST Credit Note to beInvoice No. 15 (GST Credit Note to be
issued) – 14,10,000 98,05,580
September 18, 2020 NEFT of Rs. 5 lakh by A Ltd.
–
October 6, 2020 Goods sold/Invoice No. 105
77,61,600
5,00,000 93,05,580
– 1,70,67,180, ,
October 8, 2020 NEFT of Rs. 80 lakh by A Ltd.
–
November 7, 2020 TCS deposited
–
November 12, 2020 NEFT of Rs. 60 lakh by A Ltd.
79,97,377 90,69,803 2,623 (Cr)
2,623 (Dr)
–
December 7, 2020 TCS deposited
–
December 28, 2020 Goods sold/ Invoice No. 584
1,38,06,000
February 12, 2021 NEFT of Rs. 95 lakh by A Ltd.y , y
–
March 7, 2021 TCS deposited –
March 31, 2021 Balance c/d
–
April 1, 2021 Balance b/d –
©Vinod K. Singhania
p –
April 15, 2021 NEFT of Rs. 70 lakh (for part payment
of outstanding amount + advance of
Rs. 40 lakh) –
May 7, 2021 TCS deposited –

21. A few clarifications
Date Details A Ltd.
Dr Cr Total
Rs. Rs. Rs.
April 1, 2020 Opening balance 39,06,000 – 39,06,000
TCS
Rs.
July 2, 2020 Goods sold/Invoice No. 15
40,28,000 – 79,34,000
August 16, 2020 Goods sold/Invoice No. 36
32,81,580 – 1,12,15,580
August 17, 2020 Defective goods return pertaining to
Invoice No 15 (GST Credit Note to beInvoice No. 15 (GST Credit Note to be
issued) – 14,10,000 98,05,580
September 18, 2020 NEFT of Rs. 5 lakh by A Ltd.
–
October 6, 2020 Goods sold/Invoice No. 105
77,61,600
5,00,000 93,05,580
– 1,70,67,180, ,
October 8, 2020 NEFT of Rs. 80 lakh by A Ltd.
–
November 7, 2020 TCS deposited
–
November 12, 2020 NEFT of Rs. 60 lakh by A Ltd.
79,97,377 90,69,803 2,623 (Cr)
2,623 (Dr)
59,95,503 30,74,300 4,497 (Cr)–
December 7, 2020 TCS deposited
–
December 28, 2020 Goods sold/ Invoice No. 584
1,38,06,000
February 12, 2021 NEFT of Rs. 95 lakh by A Ltd. Receipt of sale
9,9 , ,7 , , ( )
4,497 (Dr)
y , y
–
March 7, 2021 TCS deposited –
March 31, 2021 Balance c/d
–
April 1, 2021 Balance b/d –
p f
consideration
60 lakh × 100
100 + t
©Vinod K. Singhania
p –
April 15, 2021 NEFT of Rs. 70 lakh (for part payment
of outstanding amount + advance of
Rs. 40 lakh) –
May 7, 2021 TCS deposited –
100 t
t = 0.075

22. A few clarifications
Date Details A Ltd.
Dr Cr Total
Rs. Rs. Rs.
April 1, 2020 Opening balance 39,06,000 – 39,06,000
TCS
Rs.
July 2, 2020 Goods sold/Invoice No. 15
40,28,000 – 79,34,000
August 16, 2020 Goods sold/Invoice No. 36
32,81,580 – 1,12,15,580
August 17, 2020 Defective goods return pertaining to
Invoice No 15 (GST Credit Note to be
Receipt of sale
Invoice No. 15 (GST Credit Note to be
issued) – 14,10,000 98,05,580
September 18, 2020 NEFT of Rs. 5 lakh by A Ltd.
–
October 6, 2020 Goods sold/Invoice No. 105
77,61,600
5,00,000 93,05,580
– 1,70,67,180
p
consideration
95 lakh × 100
100 + t, ,
October 8, 2020 NEFT of Rs. 80 lakh by A Ltd.
–
November 7, 2020 TCS deposited
–
November 12, 2020 NEFT of Rs. 60 lakh by A Ltd.
79,97,377 90,69,803 2,623 (Cr)
2,623 (Dr)
59,95,503 4,497 (Cr)30,74,300
100 + t
t = 0.075
–
December 7, 2020 TCS deposited
–
December 28, 2020 Goods sold/ Invoice No. 584
1,38,06,000
February 12, 2021 NEFT of Rs. 95 lakh by A Ltd.
9,9 ,
1,68,80,300
, ( )
4,497 (Dr)
,74,
94 92 880 73 87 419 7 120 (Cr)y , y
–
March 7, 2021 TCS deposited –
March 31, 2021 Balance c/d
–
April 1, 2021 Balance b/d –
94,92,880 73,87,419 7,120 (Cr)
7,120 (Dr)
73,87,419
73,87,419
©Vinod K. Singhania
p –
April 15, 2021 NEFT of Rs. 70 lakh (for part payment
of outstanding amount + advance of
Rs. 40 lakh) –
May 7, 2021 TCS deposited –

23. A few clarifications
Date Details A Ltd.
Dr Cr Total
Rs. Rs. Rs.
April 1, 2020 Opening balance 39,06,000 – 39,06,000
TCS
Rs.
July 2, 2020 Goods sold/Invoice No. 15
40,28,000 – 79,34,000
August 16, 2020 Goods sold/Invoice No. 36
32,81,580 – 1,12,15,580
August 17, 2020 Defective goods return pertaining to
Invoice No 15 (GST Credit Note to beInvoice No. 15 (GST Credit Note to be
issued) – 14,10,000 98,05,580
September 18, 2020 NEFT of Rs. 5 lakh by A Ltd.
–
October 6, 2020 Goods sold/Invoice No. 105
77,61,600
5,00,000 93,05,580
– 1,70,67,180
Receipt of sale
consideration, ,
October 8, 2020 NEFT of Rs. 80 lakh by A Ltd.
–
November 7, 2020 TCS deposited
–
November 12, 2020 NEFT of Rs. 60 lakh by A Ltd.
79,97,377 90,69,803 2,623 (Cr)
2,623 (Dr)
59,95,503 4,497 (Cr)30,74,300
60 lakh × 100
100 + t
50 lakh +
t = 0 1–
December 7, 2020 TCS deposited
–
December 28, 2020 Goods sold/ Invoice No. 584
1,38,06,000
February 12, 2021 NEFT of Rs. 95 lakh by A Ltd.
9,9 ,
1,68,80,300
, ( )
4,497 (Dr)
,74,
94 92 880 73 87 419 7 120 (Cr)
t = 0.1
y , y
–
March 7, 2021 TCS deposited –
March 31, 2021 Balance c/d
–
April 1, 2021 Balance b/d –
94,92,880 73,87,419 7,120 (Cr)
7,120 (Dr)
73,87,419
73,87,419
©Vinod K. Singhania
p –
April 15, 2021 NEFT of Rs. 70 lakh (for part payment
of outstanding amount + advance of
Rs. 40 lakh) –
May 7, 2021 TCS deposited –
1,09,94,006
36,06,587
(Cr) 5,994 (Cr)
5,994 (Dr)

24. A few clarifications
Sale of cars by a manufacturer to a dealerSale of cars by a manufacturer to a dealer
Different Seller Buyer Sale consideration of motor vehicles during Whether Whether TCS
cases the financial year 2020-21 (value of each car
exceeds Rs. 10 lakh)
TCS is
required
under
section
( )
is required
under section
206C(1H)Up to
September 30,
From October
1, 2020
Total
206C(1F)
p
2020
Case 1 X Ltd. P Ltd. Rs. 90 lakh – Rs. 90
lakh
Not
applicable
Not
applicable
Case 2 Y Ltd. Q Ltd. Rs. 230 lakh Rs. 700 lakh Rs. 930
lakh
Not
applicable
Applicable
on Rs. 700
lakh
Case 3 Z Ltd. R Ltd. Rs. 1800 lakh Rs. 40 lakh Rs. 1840
lakh
Not
applicable
Applicable
on Rs. 40
lakh
©Vinod K. Singhania

25. A few clarifications
Sale of cars by a dealer to a consumer
Different
cases
Seller Buyer Sale consideration of motor vehicles during the
financial year 2020-21
Whether TCS is
required under
Whether TCS is
required under
Sale of cars by a dealer to a consumer
section
206C(1F)
section
206C(1H)
Up to
September 30,
2020
From October 1,
2020
Total
Case 1 A Ltd. S Ltd. (two
cars are
Rs. 9 lakh Rs. 80 lakh Rs. 89
lakh
TCS
applicable on
Not
applicablecars are
purchased)
lakh applicable on
Rs. 80 lakh
applicable
Case 2 B Ltd. T (two cars
are purchased)
Rs. 80 lakh Rs. 9 lakh Rs. 89
lakh
TCS
applicable on
Rs 80 lakh
TCS
applicable on
Rs 9 lakhRs. 80 lakh Rs. 9 lakh
Case 3 C Ltd. U Ltd. (five
cars are
purchased)
Car 1 : Rs. 9
lakh
Car 2 : Rs.
15 lakh
Car 3 : Rs. 8 lakh
Car 4 : Rs. 12
lakh
Car 5 : Rs. 50
Rs. 94
lakh
TCS
applicable on
Car 2, Car 4
and Car 5
Not
applicable
15 lakh Car 5 : Rs. 50
lakh
and Car 5
Case 4 D Ltd. V Ltd. (five
cars are
purchased)
Car 1 : Rs.
69 lakh
Car 2 : Rs. 8
Car 3 : Rs. 7 lakh
Car 4 : Rs. 6 lakh
Car 5 : Rs. 11
Rs. 101
lakh
TCS
applicable on
Car 1 and
TCS
applicable on
Rs. 13 lakh
©Vinod K. Singhania
lakh lakh Car 5 (i.e., Car 3
and Car 4)

26. A few clarifications
F l li d t id t i liFuel supplied to non-resident airlines
 Th i i f ti 206C(1H) h ll The provision of section 206C(1H) shall
not apply on the sale consideration
i d f f l li d t id treceived for fuel supplied to non-resident
airlines at airports in India.
©Vinod K. Singhania

27. A few clarifications
T ti i d t th h i E hTransactions carried out through various Exchanges
 N TCS T ti i iti / diti No TCS - Transactions in securities/ commodities
traded through recognized stock exchanges or
cleared and settled by the recognized clearingcleared and settled by the recognized clearing
corporation (including entities located in IFSC).
 No TCS - Transactions in electricity, renewableNo TCS Transactions in electricity, renewable
energy certificates and energy saving certificates
traded through power exchanges
©Vinod K. Singhania

28. ThanksThanks
vks@taxmann.com