TCS on Sale of Dolocha/Dolachar/Coalchar1
This query is : Resolved
20 June 2024
Please tell me whether TCS is to be charged or not on sale of dolachar
20 June 2024
Reply with case law or notification
20 June 2024
Mining sector is an important segment of Indian economy but the trading of minerals remained largely unregulated resulting in non-reporting or under-reporting of trading in minerals trading transactions for the taxation purpose. In order to collect tax at the earliest point of time and also to improve reporting mechanism of transactions in mining sector, it is proposed that tax at the rate of 1% shall be collected by the seller from the buyer of the following minerals:
(a) Coal;
(b) Lignite; and
(c) Iron ore.
However, the seller shall also not collect tax on sale of the said minerals if the same are purchased by the buyer for personal consumption. Further, the seller of these minerals shall not collect tax if the buyer declares that these minerals are to be utilized for the purposes of manufacturing, processing or producing articles or things.
This amendment will take effect from 1st July, 2012.
Extract from finance bill, 2012
(a) Coal;
(b) Lignite; and
(c) Iron ore.
However, the seller shall also not collect tax on sale of the said minerals if the same are purchased by the buyer for personal consumption. Further, the seller of these minerals shall not collect tax if the buyer declares that these minerals are to be utilized for the purposes of manufacturing, processing or producing articles or things.
This amendment will take effect from 1st July, 2012.
Extract from finance bill, 2012
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20 June 2024
Sec. 206(c)(1A)
(1A) Notwithstanding anything contained in sub-section (1), no collection of tax shall be made in the case of a buyer, who is resident in India, if such buyer furnishes to the person responsible for collecting tax, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the goods referred to in column (2) of the aforesaid Table are to be utilized for the purposes of manufacturing, processing or producing articles or things or for the purposes of generation of power and not for trading purposes.
case law: Refer:: https://taxguru.in/income-tax/tcs-transaction-purchase-coal-generation-power.html
(1A) Notwithstanding anything contained in sub-section (1), no collection of tax shall be made in the case of a buyer, who is resident in India, if such buyer furnishes to the person responsible for collecting tax, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the goods referred to in column (2) of the aforesaid Table are to be utilized for the purposes of manufacturing, processing or producing articles or things or for the purposes of generation of power and not for trading purposes.
case law: Refer:: https://taxguru.in/income-tax/tcs-transaction-purchase-coal-generation-power.html
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20 June 2024
"Dalochar emerges as a by-product in manufacturing of Sponge Iron"
Advance Ruling - KAR ADRG 60/2019 Date 20.09.2019
Advance Ruling - KAR ADRG 60/2019 Date 20.09.2019
21 June 2024
Thanks for your reply with referred case laws. That's mean TCS is charged on Sale of Dolochar if Form 27C is not provided by the buyer.
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21 June 2024
Yes, correct.
21 June 2024
Resolved with detailed discussion.
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30 August 2024
Good luck.
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