TCS on Sale of Goods – An effort to clear the mist of confusions

• January 28, 2021
• CA Chandan Agarwal's Office

It’s been almost four months for the implementation of Section 206C (1H), but still, a lot of confusions are there in the mind of taxpayers. Here, an effort has been made to share my knowledge with all of you which could help to clear the mist of confusions.

Q.1 When the TCS should be collected from customer?

Ans. Regarding timing of TCS collection, normally two opinions are given by people. One opinion say that TCS should be charged at the time of creating sale invoice, second opinion advise for collecting it at the time of receipt of payment. Let us see what Section 206C (1H) says about it. The said section use the phrase ‘at the time of receipt of such amount’ for timing of TCS Collection. After reading this, it is clear that first option of collecting TCS at the time of sale invoicing is not acceptable in law. Now, we discuss about second option. It is in accordance with the law that TCS should be collected at the time of receipt of sale consideration. But the question arises – Is it practically possible? These days almost all payments are received through banking channel and at that time, TCS collection is not possible. So technically, TCS is possible to be collected after receiving sale consideration, not at the time of receipt of sale consideration.

Read more 0n: https://taxguru.in/income-tax/tcs-sale-goods-effort-clear-mist-confusions.html