TCS Provision at a Glance for FY 2017-18 Who is Liable to Collect TCS As per Section 206C(1), Every Person being a seller of Goods of nature specified in table below shall, At the time of debiting to the account of buyer or, Receipt of amount from the buyer by any mode, Whichever is earlier Collect an amount equal to percentage specified in the below table of the amount received for the sale of goods as income tax. Sl. No.Nature of goods Percentage (i) Alcoholic Liquor for human consumption One per cent (ii) Tendu leaves Five per cent (iii) Timber obtained under a forest lease Two and one-half per cent (iv) Timber obtained by any mode other than under a forest leasetwo and one-half per cent (v) Any other forest produce not being timber or tendu leaves Two and one-half per cent (vi) Scrap One per cent (vii) Minerals, being coal or lignite or iron ore One per cent: Exemption from collection of Tax at source As per Section 206C (1A) read with rule 37C, no collection of tax shall be made in the case of a buyer, who is resident in India and furnishes to the person responsible for collecting tax, a declaration in writing in duplicate in the form 27C and verified in the manner prescribed in the form to the effect that the goods specified in the above table are to be utilised for the purposes of manufacturing, processing or producing articles or things or for the purposes of generation of power and not for trading purposes. The person responsible for collecting tax shall deliver or cause to be delivered to the Chief Commissioner or Commissioner, one copy of the declaration on or before the seventh day of the month next following the month in which the declaration is furnished to him.
As per Section 206C (1C), Every person (being a Contractor or Licensor or Lessor), who grants a lease or a licence or enters into a contract or otherwise transfers any right or interest either in whole or in part in any parking lot or toll plaza or mine or quarry, to another person, other than a public sector company (hereafter in this section referred to as "licensee or lessee") for the use of such parking lot or toll plaza or mine or quarry for the purpose of business shall, At the time of debiting to the account of licensee or lessee or, At the time of receipt of such amount from licensee or lessee by any mode, Whichever is earlier Collect an amount equal to percentage specified in the below table of amount charged for contract, license or lease as income tax. Sl. No.Nature of contract or licence or lease, etc. Percentage (i) Parking lot Two per cent (ii) Toll plaza Two per cent (iii) Mining and quarrying (excluding Mining and Two per cent. quarrying of mineral Oil) As per Section 206C(1F), Every person, being a seller, who receives any amount as consideration for Sale of a motor vehicle of the value exceeding ten lakh rupees, shall at the time of receipt of such amount, collect from the buyer a sum equal to one per cent of the sale consideration as income-tax. Requirement of collection of tax at source in case of receipt of cash in consideration for sale or service of more than Rs.5 Lakhs in case of Jewellery and Rs. 2 Lakhs in case of Bullion, other goods or services has been removed by Finance Act 2017. Such transactions have been prohibited by insertion of a new section 269ST by Finance Act 2017. Collection of tax at source at lower rates As per section 206C(9) read with rule 37G & 37H, Where the Assessing Officer is satisfied that the total income of the buyer or licensee or lessee justifies the collection of the tax at any lower rate than the relevant rate specified in subsection (1) or sub-section (1C), the Assessing Officer shall, on an application made in
Form No. 13 by the buyer or licensee or lessee in this behalf, give to him a certificate for collection of tax at such lower rate than the relevant rate specified in sub-section (1) or sub-section (1C). As per section 206C(10), on receipt of such certificate, the person responsible for collection of tax at source shall collect tax at the rate specified in such certificate until it is cancelled by the assessing officer. Due Dates for deposit of Tax Collected at source As per Section 206C (3) read with rule 37CA, Tax collected at source shall be deposited as under : i. Where TCS is collected by an office of the government, it shall be paid to the credit of central government 1. on the same day where the tax is so paid without production of an incometax challan; and 2. on or before 7th of the month following the month in which collection is made, where tax is paid accompanied by an income-tax Challan. ii. Where TCS is collected by person other than an office of Government it shall be paid to central government on or before 7th day of the month following the month in which collection is made. Where tax has been deposited by an office of government without production of an income tax challan, the authorised person of the office of government shall furnish a form 24G on or before 30th day of April where collection is made in the month of march and in any other case on or before 15 days from the end of the relevant month. Point to be noted: Unlike TDS, no relaxation is available in case of month of march where TDS can be deposited upto 30th April. In other words TCS for the month of March is to be deposited on or before 7th April and not on or before 30th April. Due dates for Furnishing of Return of Tax Collected at source As per rule 31AA of Income tax Rules, Every collector shall submit a quarterly statement in form No. 27EQ to the Director general of Income Tax or person authorised by Director general of Income Tax within the time prescribed in the below table :
Sl. Quarter of the financial Due date No. year ended 1. 30th June 15th July of the financial year 2. 30th September 15th October of the financial year 3. 31st December 15th January of the financial year 4. 31st March 15th May of the financial year immediately following the financial year in which collection is made Consequences of failure to collect TCS or after collecting payment to Central Government within due dates Any person responsible for collecting TCS as per provision of sub-section 3 of Section 206C who fails to collect such TCS or after collection fails to pay as required by this act, shall be deemed to be an assessee in default and liable to pay such TCS along with interest and penalty leviable as per the provision of this act. However person shall not be deemed to be an assessee in default and no interest and penalty is payable if the buyer, licensee or lessee- (i) has furnished his return of income under section 139; (ii) has taken into account such amount for computing income in such return of income; and (iii) has paid the tax due on the income declared by him in such return of income, and the person responsible for collecting TCS furnishes a certificate to this effect from an accountant in such form no. 27BA. Interest for late deposit of Tax collected at Source As per Section 206C(7), If the person responsible for collecting tax does not collect the tax or after collecting the tax fails to pay it as required, he shall be liable to pay simple interest at the rate of One per cent per month or part thereof on the amount of such tax from the date on which such tax was collectible to the date on which the tax was actually paid and such interest shall be paid before furnishing the quarterly statement for each quarter. Late Filing Fees and Penalty for failure to furnish/delay in furnishing the TCS Statements
A person who fails to file the TDS/TCS return or does not file the TDS/TCS return by the due dates prescribed in this regard has to pay late filing fees as provided under section 234E and apart from late filing fees he shall be liable to pay penalty under section 271H. Late filing fees under section 234E As per section 234E, where a person fails to file the TCS return on or before the due date prescribed in this regard, then he shall be liable to pay, by way of fee, a sum of Rs. 200 for every day during which the failure continues. The amount of late fees shall not exceed the amount of TDS. The late filing fees shall be deposited before filing the TDS return. Penalty under section 271H As per section 271H, where a person fails to file the TCS return on or before the due dates prescribed in this regard, then assessing officer may direct such person to pay penalty under section 271H. Minimum penalty can be levied of Rs. 10,000 which can go upto Rs. 1,00,000. Penalty under section 271H will be in addition to late filing fees prescribed under section 234E. Penalty under section 271H can also be levied if the collector files an incorrect TCS return. No penalty under section 271H will be levied in case of delay in filing the TCS return if following conditions are satisfied: The tax deducted/collected at source is paid to the credit of the Government Late filing fees and interest (if any) is paid to the credit of the Government. The TCS return is filed before the expiry of a period of one year from the due date specified in this behalf. It should be noted that the above relaxation is applicable only in case of penalty levied under section 271H for delay in filing the TCS return and not in case of filing incorrect TCS statement. Source courtesy:caclubindia.com