Accounting Treatment Of Tcs U S 206C 1H On Sale Of Goods

Accounting Treatment of TCS U/S 206c

These provisions are applicable only in respect of transaction of sale of goods and do not apply to sale of services. Sub-section (1H) of section 206C has been made effective from 1st October 2020 and state that:

A Seller of Goods is liable to collect TCS from Buyer on Sale of any goodsSeller means a person whose total sales, gross receipts or turnover from the business carried on by him exceed Rs.10 Crores during the previous year ended on 31st March.TCS to be collected if the Value/Aggregate Value received for Goods from a buyer is more than ₹ 50 Lakhs in a financial year.TCS to be collected on [Total Sale Value received – ₹ 50 Lakhs.Rate of TCS is 0.075% from 01.10.2020 to 31.03.2021 and thereafter the rate will be 0.1%.If the buyer does not provide PAN/Aadhar number then the TCS shall be collected at 1%, instead of 0.1%. In such situation, Covid-19 related concession is also not available.TCS would be charged on total invoice value inclusive of GST.

TCS is not applicable when the buyer is from the following category:-

Central GovernmentState GovernmentEmbassyCommission/High CommissionLegationConsulateTrade Representation of Foreign stateLocal Authority

Some of the basic compliances that a business entity i.e. vendor selling the:-

TAN number – Vendor needs to have Tax Deduction and Collection Account Number (“TAN”).Collecting the tax – Tax to be collected at the time of receipt of sale consideration.Issuance of certificate (Form no 27D) within 15 days from the due date for filing of filing of TCS Return.

Accounting entry for TCS on Sale (In the Books of sealer)

(i) At the time of issuance of invoice:

(ii) At the time of receipt of sale consideration along with TCS:

Note: TCS is to be deposited only on receipt of sale consideration along with TCS.

Accounting Treatment Of Tcs U S 206C 1H On Sale Of Goods