Finance Act, 2020 amended provisions relating to TCS with effect from 1st October, 2020 to provide that seller of goods shall collect tax @ 0.1 per cent (0.075% up to 31.03.2021) if the receipt of sale consideration from a buyer exceeds Rs. 50 lakh in the financial year.

Important information & understanding

• A seller would be required to collect tax only if his turnover exceeds Rs. 10 crore in the last financial year. (FY. 2019-2020)
• TCS shall be applicable only on the receipt exceeding Rs. 50 lakh by a seller from a particular buyer.
• Export of goods has been exempted
• Applicable only for sale of Goods
• Not applicable for sale of Services
• TCS has not been made applicable to the amount received before 1st October, 2020
• Example - A seller who has received Rs. 1 crore before 1st October, 2020 from a particular buyer and receives Rs. 5 lakh after 1st October, 2020 would be required to collect tax on Rs. 5 lakh only and not on Rs. 55 lakh [i.e Rs.1.05 crore - Rs. 50 lakh (threshold)]