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Is TCS is applicable...?

Himanshu (Chief Accountant) (96 Points)

21 April 2010

Hello Friends,

Can anyone suggest is TCS applicable for on scrap (sales) export to outside india???

Seller is from india & buyer is from Netherland.

Pl. urgent reply..

Thnks in advance..

Himanshu

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3 Replies

Amir (Learner) (4016 Points)
Replied 21 April 2010

Dear Sir,

I am confused but can share my confusion-

Reason in favour of collection - No specific exemptiom except in case of

(i) an embassy, a high commission, legation, commission, consulate and the trade representation, of a foreign State and a club; or(apart from PSU & Govt.)

(ii) a buyer in the retail sale of such goods purchased by him for personal consumption

Reasons against collection - TCS is not a tax in itself but a way of collection of "Tax on Income" only....The whole purpose behind TCS is to make a "pre-recovery of taxes" on those transactions which will happen as a result of the transaction that suffers TCS. So, where scarp, etc is sold to other country then whether the end product of that transaction will have any taxable income in India or not nobody knows...and if we collect TCS on this then there might be cases of conflict in terms of Sec 9 {Business Connection}

Let's wait for the inputs from other members.

In case of doubt, my suggestion would be - If you have time before giving effect to this transaction then best thing is to obtain an "Advance ruling" otherwise go for "legal opinion"