Tax collection on timber and forest produce requires seller collection without a monetary threshold, subject to declaration relief.

Tax collection at source applies to sales of timber obtained under a forest lease or otherwise, and to forest produce other than timber and tendu leaves obtained under a forest lease. The seller must collect tax at source at 2%, with no monetary threshold. A declaration mechanism is available under section 394(2). The applicable framework substantially reproduces the earlier provisions without substantive modification.

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