TCS on liquor licence fees applies only when payment confers a right to receive specified goods, not mere trading permission.

Section 206-C applies only when payment to a seller gives the payer a right to receive specified goods covered by the provision. A government liquor licence merely authorises the holder to trade in liquor and does not, by itself, confer a right to receive goods from a seller. The article notes that the relevant trigger arises only when an order is placed on the manufacturer or supplier, not at the stage of paying licence fee. On that reasoning, government-issued liquor licensees are not treated as "buyers" for this provision, and tax collection at source is not attracted to the licence-fee payment.

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Issues: Whether Section 206-C of the Income-tax Act, 1961 applied to licence-fee payments made by liquor traders holding government licences, and whether such licensees fell within the expression "buyer" for the purpose of that provision.

Analysis: Section 206-C applies where payment to the seller results in the payer obtaining the specific goods mentioned in the Table to the section, or a right to receive those goods. A government licence merely permits the licensee to carry on trade in the relevant item. Payment of licence fee does not by itself confer a right to receive the goods. The goods are obtained only when an order is placed on the manufacturer or supplier, and it is at that stage that the provision can be attracted. The explanation to sub-section (11) did not assist because a "buyer" is a person who, by payment, acquires a right to receive specific goods, not a person merely authorised to carry on business in that trade.

Conclusion: Section 206-C was held not to apply to government-issued liquor licences, and the licensee was not treated as a "buyer" under that section.

Ratio Decidendi: TCS under Section 206-C is attracted only where payment confers a right to receive specified goods from the seller, and a mere trade licence does not make the licensee a buyer of goods.

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