TaxTMI 
TaxTMI 
TCS applicability on Manufacturing Scrap
11 Oct 2010 
2 Replies 
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TCS on scrap: applicability and applicable rate contested; definition hinges on statutory explanation and transaction characterisation.
TCS on sale of manufacturing scrap is disputed due to differing rates; assessors must identify the material type, period and basis for rates and apply the statutory test that scrap means waste and scrap from manufacturing or mechanical working not usable as such because of breakage, cutting up, wear or similar reasons, and support the classification with documentary evidence. (AI Summary)
TCS on sale of manufacturing scrap is disputed due to differing rates; assessors must identify the material type, period and basis for rates and apply the statutory test that scrap means waste and scrap from manufacturing or mechanical working not usable as such because of breakage, cutting up, wear or similar reasons, and support the classification with documentary evidence. (AI Summary)
We have received a notice from Income Tax department mentioning the TCS rate to be 2.2667 % whereas we have deducted it @ 1.113% under the category of Scrap. Kindly adivce what is covered in the definition of Scrap ?