Applicability of tcs u/s 206(c)

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 July 2012 I am trader of iron & steel scrap and do all the purchases from Manufacturers after paying TCS, I further sell this material to manufacturers.

My question is whether I am Liable to Charge TCS keeping in mind that I am Trader & all my purchases are after paying TCS, Since I have not obtained any Form 27C

My second question is whether this is a multi Point tax or just levied at souces i.e. Manufacturers.

CA Navin Jain

CA Navin Jain (Expert)
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06 July 2012 you are not liable to charge the TCS

Querist : Anonymous

Querist : Anonymous (Querist)

06 July 2012 Please reply sir, How I am emempted from chrging TCS.

If Possible please provide the ruling as well

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CA Navin Jain

CA Navin Jain (Expert)
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06 July 2012 TCS IS APPLICABLE ON THE SCRAP GENERATED THROUGH MANUFACTURING,

Hence you are not a manufacture, you are a trader therefore ypu are not liable to charge tcs.

Querist : Anonymous

Querist : Anonymous (Querist)

06 July 2012 But, under which section are traders exempted

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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06 July 2012 Traders are also liable for TCS u/s 206C. exemption is avalailable only to those traders who sell the scraps to retail purchasers for personal consumption.

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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06 July 2012 Section 206C is applicable to every seller whether it is manufacture or it is a trader.
But What you are selling as scrap is very important to look at, because only scrap arising from manufacturing activity is liable for TCS.

It is also pertinent to look at the heading of the section which uses the words " business of trading in..".

Querist : Anonymous

Querist : Anonymous (Querist)

06 July 2012 Dear Kedia Sir,

I have been dealing in only scraps generated from Manufacturing process, I have been paying TCS on all my purchases, but Am I liable to charge TCS on my sale as well.

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CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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06 July 2012 Yes.. you will have to collect from the buyers and pay to the government as I said in my earlier reply.