What's New

Tax Collected at Source (TCS) on Goods


Tax Collected at Source (TCS) on Goods

Finance Act 2020 introduced a new provision under Section 206C (1H) for the Tax Collected at Source (TCS) on Goods With effect from 1st of October 2020.

Highlights are as under.

1.     Sub section 1H under Section 206C is applicable from 01.10.2020.

2.     Applicable to every person whose total sales, gross receipt or turnover is more than ? 10 Cr during the preceding Financial Year

3.     TCS is to be collected @ 0.1% on the amount exceeding Rs.50L during the financial year in respect of sale of goods made to a buyer – GST Registered buyer

4.     TCS is to be collected @ 1.0% on the amount exceeding Rs.50L during the financial year in respect of sale of goods made to a buyer – Un-registered buyer (non PAN / Aadhaar)

5.     For the period from 01.10.2020 to 31.03.2021 TCS rate will be 0.075%.

Seller: Seller means a person whose total sales, gross receipts or turnover from the business carried on by him exceed Ten Crore rupees during the financial year immediately preceding the financial year in which the sale of goods (Sale of Services is not covered) is carried out, not being a person as the Central Government may, by notification in the Official Gazette, specify for this purpose, subject to such conditions as may be specified therein.

Buyer: Buyer means a person who purchases any goods, but does not include,—

(A) the Central Government, a State Government, an embassy, a High Commission, legation, commission, consulate and the trade representation of a foreign State; or

(B) a local authority as defined in the Explanation to clause (20) of section 10; or

(C) a person importing goods into India or any other person as the Central Government may, by notification in the Official Gazette, specify for this purpose, subject to such conditions as may be specified therein;

Goods: However the Goods have not been defined in the Income Tax Act, hence we have to borrow the reference from other acts related to Goods like Sales of Goods Act, 1930 or Goods and Service Tax Act 2017. In the both Acts the Term “Goods” has been defined as “Goods” means every kind of movable property other than money and securities but includes actionable claims, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply .

So if any person deals in the goods covered under the above definition then he shall be liable to Collect TCS under the newly inserted provisions.

However, Seller is not required to Collect TCS on all the Types of sales under Section 206C(1H), there are some exceptions give to this provision, these are listed below:

– If the Goods are Exported out of India

– If the goods are of such type on which TDS is liable to be deducted by the buyer (Like in case of Job Work, Composite Supply).

– If the Seller is liable to collect the TCS under any other clause of Section 206C. (Like in case of Motor Vehicle dealer he shall collect the TCS on the motor vehicles if the value of the vehicle exceeds Rs. 10 Lac)


1.   Till the limit of Rs. 50 Lac there is no requirement to Collect TCS by the Seller however the moment purchases of the buyer exceeds Rs. 50 Lac from the same seller then on such excess amount seller shall collect the TCS. However, in the First year of implementation of this new provision Sale made to buyers up to 30th September 2020 shall not be liable to collect the TCS.

Interactive Session With Growth Entrepreneurs

Do you want to take your business to the next level?

Whether to diversify into unrelated activities or not?

At what stage one should think of raising funds and what is the good option, either Equity, Debt or combination of both?

Want to expand geographically across India but don’t know how?

What are the preparations required for SME Listing?

Want to launch an e-commerce portal for the business you are already running but don’t know how?

Looking to change structure of your business from proprietorship to LLP or Company but don’t know how?

If you are looking to find answer to all the above questions, here is an opportunity for you. 


Harnesstouch raises Rs. 1 crore

Harness Touch Private Limited raises Rs. One crore as Angel funding from Club Ah! (part of Ah! Ventures India) which is a growing angel-investment network.

To read more, click here.

I have an Idea Meetup #2

In the life of an entrepreneur, things are rather created than inherited. Nothing comes for granted, rather everything is earned.

Here I am just trying to compact the philosophy of "entrepreneurship" in a single line. What happens when your mind cannot stop thinking of ideas and you are confused whether they can be really executed or they are just some insane "stupid" ideas!

Entrepreneur Adda (www.entrepreneuradda.com) which is the flagship organization for the initiative "I am Entrepreneur" is announcing it's SECOND meetup "I have an Idea". We plan to organize a series of such "casual though sincere" meetups.

There are absolutely NO charges for this meetup! For more details, click here.

Free Consulting Session

Entrepreneur Adda has launched a programme under which we are offering anyone willing to understand the dynamics of their idea in the entrepreneurial space.

This programme is also open to those entrepreneurs who have already started and fighting the uncertainties of this space. We will keep updating our Events sheet with session details regularly.


Target audience: Entrepreneurs, Managers, Students and working people with a will to understand more about Entrepreneurship

Evaluate your Business Idea

Join Us

Investor Subscribe for Newsletter