Important Aspects: Transactions on which TCS is Applicable

I – Sale of Goods [Section 206C(1)]
The tax is to be collected at source by seller for certain goods that are utilized for trading purposes. These certain goods with applicable tax rates are as follows:

Note:
– No TCS is to be collected if the goods are to be utilised for the purposes of manufacturing, processing or producing articles or things or for the purposes of generation of power

– Seller means the Central Government, a State Government or any local authority or corporation or authority established by or under a Central, State or Provincial Act, or any company or firm or co-operative society and also includes an individual or a Hindu undivided family whose total sales, gross receipts or turnover from the business or profession carried on by him exceed [one crore rupees in case of business or fifty lakh rupees in case of profession]during the financial year immediately preceding the financial year in which the goods of the nature specified in the Table above are sold.

II – Contract or licence or lease etc [Section 206C(1C)]
The seller has to collect tax on granting of lease or license or for entering into contract for transferring any right or interest in whole or in part in any parking lot or toll plaza or mine or quarry, to another person, other than a public sector company. The applicable tax rates for the same are as follows:

Also Read: Section 194C: TDS On Payments To Contractors

III – Sale of a motor vehicle of the value exceeding Rs. 10 lacs [Section 206C(1F)]
As per this provision, if the seller receives any amount as consideration for sale of motor vehicle exceeding Rs. 10 lacs, then tax is to be collected at source. The TCS rates for sale of motor vehicle (value > Rs. 10 lacs) are as follows

Note:
Following persons are outside the ambit of Section 206C(1F):
– Central Government, a State Government and an embassy, a High Commission, legation, commission, consulate and the trade representation of a foreign State
– Local authority
– Public sector company which is engaged in the business of carrying passengers.

IV – Foreign remittance through Liberalized Remittance Scheme (LSR) [Section 206C(1G)(a)]
The tax collected at source is to be done by authorized dealer for the remittances made out of India under the Liberalized Remittance Scheme of the RBI. The applicable tax rates on remittances are as follows:

The above provisions are not applicable, if the buyer is:
– Liable to deduct TDS
– Central Government, a State Government, an embassy, a High Commission, a legation, a commission, a consulate, the trade representation of a foreign State, a local authority

Also Read: TDS on Foreign Remittances

V – Selling of overseas tour packages [Section 206C(1G)(b)]
Overseas tour package means any tour package which offers visit to a country or countries or territory or territories outside India. It also includes expenses for travel or hotel stay or boarding or lodging or any other expenditure of similar nature. Having stated that, the seller who sells these packages has to collect tax at source. The applicable tax rates for these packages are as follows:

VI – Consideration for sale of any goods [Section 206C(1H)]
Section 206C(1H) states that any seller who receives any amount as consideration for sale of any goods of the value or aggregate of such value exceeds Rs. 50 lacs in any previous year has to collect tax at source. The applicable tax rates for consideration of sale of any goods are as follows:

Note:
The goods are other than the goods being exported out of India or goods covered above.