TAX COLLECTED AT SOURCE

The seller deposits the TCS amount in Challan 281  within 7 days from the last day of the month in which the tax was collected.

If the tax collector responsible for collecting the tax does not collect the tax or after collecting doesn’t pay it to the government with in due dates, then he will be liable to pay interest of 1% per month or a part of the month.

Every tax collector has to submit quarterly TCS return i.e in Form 27EQ in respect of the tax collected by him in a particular quarter. The interest on delay in payment of TCS to the government should be paid before filing of the return.

Certificate of TCS

When a tax collector files his quarterly TCS return i.e  Form 27EQ, he has to provide a TCS certificate to the purchaser of the goods.

2. Form 27D is the certificate issued for TCS returns filed. This certificate contains the following details:

a. Name of the Seller and Buyer

b. TAN of the seller i.e who is filing the TCS return quarterly

c. PAN of both seller and buyer

d. Total tax collected by the seller

e. Date of collection

f. The rate of Tax applied

This certificate has to be issued within 15 days from the date of filing TCS quarterly returns.

TCS Exemptions

Tax collection at source is exempted in the following cases :

1. When the eligible goods are used for personal consumption.

2. The purchaser buys the goods for manufacturing, processing or production and not for the purpose of trading of those goods.

TCS under GST

Any dealer or traders selling goods online would get the payment from the online platform after deducting an amount tax @ 1% under IGST Act. (0.5% in CGST & 0.5% in SGST).

The tax would have to be deposited to the government by 10th of the next month.

All the dealers/traders are required to get registered under GST compulsorily.

These provisions are effective from 1st Oct 2018.

Example: Mr. Ravi (seller) is a trader who sells Electronic Products online on Flipkart (buyer). He receives an order for Rs 10,000 inclusive of tax and commission. Flipkart would thus be deducting tax for Rs 100 (1% of Rs.10000).

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