New Section 206C(1H):

Finance Act 2020 introduced a new provision U/s 206C (1H) for the Tax Collected at Source (TCS) on Goods With effect from 1st of October 2020. Applicable only to seller of any goods whose turnover in the preceding FY exceeds Rs. 10 Crore.

TCS rate shall be 0.075% (0.1% w.e.f 01^st April 2021) of the sale value from the buyer if the purchase value exceeds Rs. 50L. Applicable on the value in excess of Rs. 50 L. However, in the First year of implementation of this new provision Sale made to buyers up to 30th September 2020 shall not be liable to collect the TCS.

Buyer does not include-

1. Central or state Govt. & local authority
2. Person importing goods into India

Exceptions to the collection of TCS:

1. If the Goods are Exported out of India.
2. If the goods are of such type on which TDS is liable to be deducted by the buyer.
3. If the Seller is liable to collect the TCS under any other clause of Section 206C.

Non furnishing of the PAN attracts TCS @ 1%.

For better understanding let us take a look at the various scenarios:

Seller	Buyer	FY 19-20	FY 20-21	Sales till 30th Sep	From 01st Oct	TCS (Rs.)	Remarks
Mr.A	Mr.B	12 Cr	8 Cr	24L	65L	2925	0.075% On 39L (being excess of Rs.50L)
Mr.A	Mr.B	8 Cr	12 Cr	24L	65L	–	Turnover in the PY not exceeding Rs. 10 Cr
Mr.A	Mr.B	12 Cr	10 Cr	65L	6 L	450	Rs. 6L being turnover after 1st Oct

For the seller for applicability of TCS, Rs.10 Crore Limit shall be Consider each year. For the buyer, the limit of Rs. 50 Lakhs shall be checked every year.

The buyer can claim such tax collections against his tax liability.

Due date for payment of TCS – 7^th day of next month. Quarterly statement 15^th of subsequent quarter and for last quarter is on 15^th of May.