Collection of TCS

[Guest]

whether TCS has to be collected from the buyer if he is a manufacturer on scrap sales thank you

[CA UMA KOTHARI]

In my personal view this is a column to discuss and share knowledge and information and not simpy to get information or consultation free of cost. The query and related information provided are not suitable for discussion forum. The issue must contain full facts, and basic information gathered by the query raiser and then only a discussion can be initiated.

[DEV KUMAR KOTHARI]

I agree with Mrs. Uma Kothari

[Surender Gupta]

I do not agree with the views of CA UMA KOTHARI since this issue is a general issue and may be relevant for each manufacturer selling scrap arising out of manufacturing process. Section 206C of the Income Tax provides the provision for Tax Deduction at Source. According to the taxable given under sub section (1), TCS is required to be collected on sale of scrap at 1%. The meaning of Scrap for the purpose of TCS is given under clause (B) of Explanation below the section 206C as "scrap" means waste and scrap from the manufacture or mechanical working of materials which is definitely not usable as such because of breakage, cutting up, wear and other reasons.

[Surender Gupta]

In addition to above, no TCS is required to be collected where such scrap is to be used in further manufacturing activity by the buyer. Manufacturer seller can take a declaration in prescribed form.

AI Summary

Tax Collection at Source on scrap: liability arises on scrap sales but exempt if buyer uses scrap in manufacture. Whether TCS is collectible on sale of scrap by a manufacturer depends on the statutory charge on scrap sales where scrap means waste and scrap from manufacture that is unusable; however no TCS is required if the buyer will use the scrap in further manufacturing and provides the prescribed declaration form.