TCS ON COAL - EXEMTED ( COAL SELL TO MFG - END USER PRODUCTION UNIT)

This query is : Resolved

SHIVPRAKASH SHARMA (Querist)
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05 April 2022 when coal sale to production unit, we will be not applying tcs on gst bill [tcs 1% on coal exempt mfg unit] we take FORM 27C From Production unit so where we can see on FORM 27EQ
(on 27EQ RETURN any column show not collecting TCS Summary)

Please replay hope early as possible
Thanks & Regards
Sirji

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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11 July 2024 It seems you are asking about how to reflect the exemption from TCS (Tax Collection at Source) on coal sales to a manufacturing unit exempt under the GST Act in your Form 27EQ return.

Here’s how you can handle this situation:

1. **Exemption from TCS**: Since the manufacturing unit is exempt from TCS on coal purchases (as per your description), you will not collect TCS on the GST invoice issued to them.

2. **Form 27C**: Form 27C is used by the buyer (in this case, the production unit) to indicate to the seller (you) that TCS should not be collected on the specified transaction. This form serves as a declaration under section 206C(1A) of the Income Tax Act, 1961.

3. **Reporting in Form 27EQ**: In Form 27EQ, which is used for filing TCS returns, there is no specific column or summary for transactions where TCS is not collected due to exemption. Instead, you should include all transactions where TCS is applicable. Transactions covered by Form 27C are exempted from TCS, so they should not be included in the TCS collection details in Form 27EQ.

4. **Documentation**: Ensure you have the Form 27C from the production unit in your records. This form serves as proof that the transaction is exempt from TCS under section 206C(1A).

5. **Filing Form 27EQ**: When filing your Form 27EQ return, report all TCS collections except those covered by Form 27C exemptions. Include accurate details of the TCS collected from other transactions as per the guidelines provided by the Income Tax Department.

6. **Consultation**: If you are unsure about how to correctly file your Form 27EQ in this situation, it's advisable to consult with a tax professional or accountant who can provide guidance based on the specific details of your transactions and the applicable tax laws.

By following these steps, you should be able to appropriately handle the exemption from TCS on coal sales to the exempt manufacturing unit and accurately file your Form 27EQ return.