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TAXCOLLECTION

Ajay (CA Student) (79 Points)

01 September 2008

Sir,

Scrap sale

Mat cost 100/-

Excise 20/-

Vat 15/-

pl give the value on which TCS will be applied

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2 Replies

Satyendra sahu (service) (216 Points)
Replied 01 September 2008

Hi Ajay,

As per sec 206C of IT act,

(1) Every person, being a seller shall, at the time of debiting of the amount payable by the buyer to the account of the buyer or at the time of receipt of such amount⁹⁵ from the said buyer in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, collect from the buyer of any goods of the nature specified in column (2) of the Table below, a sum equal to the percentage, specified in the corresponding entry in column (3) of the said Table, of such amount as income-tax:

From the above it is clear that, what ever amount you are debiting to his account or recovering from him, you have to collect tax on that amont.

In your example it will

Scrap value 100 + Excise 20 + Vat 15 = 135/-

Rate - 1%

TCS = 135* 1% = 1.35

I hope it is clear to you.