Section 206C of the Income Tax Act provides for the collection of tax at source on some specified goods like alcohol, alcoholic liquor, forest produce, scrap, motor vehicle etc. In order to widen and deepen the tax net in Finance Act, 2020 a new sub section (1H) was inserted in section 206C Income tax Act.
Section 206C(1H) levy TCS on sale of any goods. This section is applicable to every person who sells goods and receives consideration for such sale if the aggregate value of such sale during the previous year exceeds fifty lakh rupees.
This section is applicable with effect from 1st October, 2020. Thus, every seller is required to collect TCS at prescribed rate on sale of goods. There are many transitional and procedural issues that require clarification from government. We have summarized the provision of TCS on sale of goods and transitional and procedural issues arising out of the provision in this write up.