Applicability of Section 206C

[Nitin Harsora]

An assessee is the Manufature of flour from the wheat. The raw material comes in the Bardan which is being sold by the assessee to the supplier who is suppling the Packing material for Finished Goods.

The query is that whether Section 206C is applicable i.e. TCS on sale of scrap when aseessee sales the Bardan.

[malhar shenoy]

For the purpose of TCS Scrap means Waste & Scrap from the manufacture or mechanical working of materials which is definitely not usable as such because of Breakage , Cutting up, wear & other reasons.

 

AI Summary

Tax Collected at Source may apply to sales of manufacturing scrap if the material is unusable after processing. The key operative point is that sales of residual material will engage Tax Collected at Source under Section 206C where the material constitutes waste and scrap from manufacture - i.e., material not usable as such because of breakage, cutting, wear or similar causes - and factual characterisation as scrap determines TCS applicability.