The Finance Act 2020 has widened the scope of TCS and brought goods within its ambit effective 1st October 2020. Now the seller of goods who has a turnover exceeding 10 crores in previous year (F.Y. 2019-20 for current year) will be liable to collect TCS on payments received. The provision is detailed as under:
| Applicability |
Where the assessee is seller of goods and his turnover exceeds Rs. 10 crores in previous year ( F.Y. 2019-20) |
| Limit |
If the receipt after 01st October, 2020 exceeds Rs. 50 lakhs then TCS has to be collected. The limit is per buyer. However, for the limit of Rs.50 lakhs, sales effected after 1st April 2020 should be considered. |
| Exclusion |
Not applicable when the Central Government/ State Government/Local Body, etc is a buyer or if the transaction is already subject to TDS or TCS. |
| Rate |
If PAN/Aadhar is provided: 0.075% of amount received (F.Y. 2021-22 onwards it will be 0.1%)
If PAN/Aadhar is not provided- 0.75% of amount received (F.Y. 2021-22 onwards it will be 1%) |
| Compliance |
TCS deducted has to be deposited by 7th of succeeding month and TCS returns have to be filed quarterly. |
Further, whether TCS will be levied on payments received from 01st October for past sales or for sales effected after October, whether the GST component of invoice also attracts TCS, still remains a question and clarification from CBDT would put the issue to rest. Till that time, in our view, TCS should be collected on sales effected after 1st October on the amount received including GST component.
