New TCS u/s.206C(ih) applicable to Service Invoices?

[gvenugopal g]

Dear Experts,

Good Evening,

Kindly clarify whether new TCS under section 206C(ih) of Income tax Act, w.e.f.01.10.2020 @0.075% is applicable to service Invoices, where some establishments raises tax invoices to their customers for materials and labour separately.

Thanks & Regards: G. VENUGOPAL

[Ganeshan Kalyani]

This TCS is applicable only on sale of goods and not on services.

AI Summary

TCS under Section 206C(1H) applies only to goods sales, not service invoices with separate material and labor charges. A query was raised regarding the applicability of the new Tax Collected at Source (TCS) under section 206C(1H) of the Income Tax Act, effective from October 1, 2020, at a rate of 0.075%, on service invoices where establishments issue separate tax invoices for materials and labor. The response clarified that this TCS applies solely to the sale of goods and not to services.