CBDT Clarification on TCS on Sale Goods issued on 29-Sep-2020
CBDT has issued a Circular No. 17 of 2020 dated 29-Sep-2020 which intends to clarify certain key aspects about TCS on Sale of Goods.
Calculation of threshold for the financial year 2020-21
The threshold of Rs. 50 Lacs is with respect to the previous year, calculation of receipt of sale consideration for triggering TCS under sub-section (1 H) of section 206C shall be computed from 1st April, 2020. Hence, if a person being seller has already received Rs. 50 Lacs or more up to 30th September 2020 from a buyer, the TCS under sub-section (IH) of section 206C shall apply on all receipt of sale consideration during the previous year, on or after 1“ October 2020, from such buyer.
TCS applicable on Receipts on or after 1st Oct 2020
Since sub-section (1H) of section 206C of the Act applies on receipt of sale consideration, the provision of this sub-section shall not apply on any sale consideration received before 1st October 2020. Consequently it would apply on all sale consideration (including advance received for sale) received on or after 1st October 2020 even if the sale was carried out before 1“ October 2020.
Adjustment for sale return, discount or indirect taxes
It is hereby clarified that no adjustment on account of sale return or discount or indirect taxes including GST is required to be made for collection of tax under sub-section (1H) of section 206C of the Act since the collection is made with reference to receipt of amount of sale consideration.
This indirectly means TCS will be applicable on on the total invoice value after adding or charging GST.