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NEW TCS PROVISIONS APPLICABLE FROM 01.10.2020

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NEW TCS PROVISIONS APPLICABLE FROM 01.10.2020

Friends,

Lot of clients and persons are calling that they are getting whatsapp and email for collecting TCS. Penalty provisions are also being sent by massages. So it is the right time to have understanding these provisions.

kindly note new TCS provisions are applicable from 01.10.2020

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TCS is the liability to collect TCS alongwith sum received. The details is as under:-

1. If you falls in below category then only you need to collect TCS.

Sno	Particular
1	“authorised dealer” mean a person authorised by the Reserve Bank of India under sub-section (1) of section 10 of Foreign Exchange Management Act, 1999 to deal in foreign exchange or foreign security.
2	Seller of overseas tour package.
3	Those sellers whose total sales, gross receipts or turnover from the business carried on by it exceed ten crore rupees during the financial year immediately preceding the financial year.

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2. TCS is applicable on following transactions.

Sno	Particular
1	on foreign remittance–of Rs. seven lakh or more in a financial year
2	on selling of overseas tour package of any amount.
3	on sale of any goods in excess of Rs. 50 lacs to any person

3. Now in details
   

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4. On foreign remittance u/s 206C(1G)(a)

Points to note:-

1. TCS is applicable on foreign remittancethrough Liberalised Remittance Scheme (LRS).
2. An authorised dealershall be liable to collect TCS.
3. When remittance out of India of an amount or an aggregate of amounts of seven lakh rupees or more in a financial year. Kindly note that Aggregate to be counted from 1st April, 2020.
4. Rate of TCS is five per cent and non-PAN/Aadhaar cases the rate shall be ten per cent. TCS shall be applicable on amount in excess of ₹ 7 lakhs in a financial year and not on the total amount.Kindly note that when the amount is remitted for the purpose of pursuing education through a loan obtained from any financial institute, rate of TCS shall be 0.5% on amount exceeding ₹ 7 lakhs.
5. No TCS is required to be collected in following cases:
   1. When the TDS under any other provisions and has deducted.
   2. When the buyer is CG, SG, an embassy, a high commission, a legation, a commission, a consulate, the trade representation of a foreign state, a local authority or any other person as notified by CG
6. “authorised dealer” mean a person authorised by the Reserve Bank of India under sub-section (1) of section 10 of Foreign Exchange Management Act, 1999 to deal in foreign exchange or foreign security.
7. For the purpose of education loan ‘Financial Institution’ means a banking company to which the Banking Regulation Act, 1949 applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf.
8. In case the educational program is cancelled or not persuaded, then the customer can claim the TCS refund by filing income tax returns.
   

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On selling of overseas tour packageu/s Section 206C(1G)(b)

Points to note:-

1. TCS is applicable on selling of overseas tour package
2. A seller of an overseas tour program package who receives any amount from any buyer shall be liable to collect TCS.
3. TCS has to collect on all transactions as there is no monetary limit for this transaction.
4. Rate of TCS is five per cent and non-PAN/Aadhaar cases the rate shall be ten per cent.
5. No TCS is required to be collected in following cases:
   1. When the TDS under any other provisions and has deducted.
   2. When the buyer is CG, SG, an embassy, a high commission, a legation, a commission, a consulate, the trade representation of a foreign state, a local authority or any other person as notified by CG
6. “Overseas tour program package” includes expenses for travel or hotel stay or boarding or lodging or any other expense of similar nature or in relation thereto.
7. if the tour package is cancelled, then the customer can claim refund of TCS by filing income tax returns.
   

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   On sale of any goods (u/s Section 206C(1H))

Points to note:-

1. TCS is applicable on sale of any goodsexcept goods on which TCS applicable as per Section 206C (1), 206C (1F) and 206C (1G).
2. A seller of goods is liable to collect TCS. Kindly note that all sellers are not required to collect TCS. TCS is required to be collected only by those sellers whose total sales, gross receipts or turnover from the business carried on by it exceed ten crore rupees during the financial year immediately preceding the financial year. Kindly note that Aggregate to be counted from 1st April, 2020.
3. Only from those buyers from whom the consideration received in a previous year is in excess of fifty lakh rupees. Kindly note that Aggregate to be counted from 1st April, 2020.Importers are not included. No TCS for export sales or service.
4. Rate of TCS is 0.1 per cent and non-PAN/Aadhaar cases the rate shall be one per cent. Note: – TCS rate has been reduced to 0.075% for the period 1^stOctober 2020 to 31^st March 2021.)
5. No TCS is required to be collected in following cases:
   1. When Central Government notify for person, subject to conditions contained in such notification, who shall not be liable to collect such TCS.
   2. from the Central Government, a State Government and an embassy, a High Commission, legation, commission, consulate, the trade representation of a foreign State, a local authority as defined in Explanation to clause (20) of section 10 or any other person as the Central Government may, by notification in the Official Gazette, specify for this purpose, subject to conditions as prescribed in such notification.
   3. When the seller is liable to collect TCS under other provision of section 206C such as Section 206C (1), 206C (1F) and 206C (1G) or the buyer is liable to deduct TDS under any provision of the Act and has deducted such amount.These goods that are specifically covered under sub-section (1), (1F) or (1G) of section 206, i.e.:
   4. Alcoholic liquor for human consumption,
   5. Tendu leaves,
   6. Timber or any other forest produce,
   7. Scrap,
   8. Minerals, being coal, or lignite or iron ore,
   9. Motor Vehicle(If value exceeds Rs. 10 lacs),
   10. Overseas tour package.

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   the TCS can be claimed same as TDS.

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   Due Date of Filing of Return by the seller

   1. The Seller has to file a return in Form 27EQ on a Quarterly basis.
   2. Due Dates of filing of Form 27EQ are: –
   3. Quarter April to June-15th July, Juky to Sept-15th October, October to December-15th January and January to March -15^thMay