Jayanta (Service) 26 November 2013

Sec206c of income tax act; tax on coal

u/s.206C of Income Tax Act, 1% TCS is payable to seller of coal. Can buyer take credit of this tax? My reading is that it is unlike Cenvat / VAT Credit.Please guide me.

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Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 ) 26 November 2013

SECTION 206(C) OF THE INCOME TAX ACT,1961 HAS BEEN AMENDED

VIDE FINANCE ACT, 2012 WHICH STIPULATES THAT EVERY PERSON BEING A

SELLER OF “MINERALS, BEING COAL OR LIGNITE OR IRON ORE” SHALL

COLLECT TAX AT SOURCE AT 1% ON GROSS SALE VALUE FROM THE BUYER

OF SUCH GOODS. THIS AMENDMENT IS WITH EFFECT FROM 01.07.2012.

HOWEVER, NO COLLECTION OF TAX SHALL BE MADE IN CASE BUYER

DECLARES IN WRITING IN DUPLICATE IN THE FORM 27(C) THAT THE COAL IS

TO BE UTILIZED FOR THE PURPOSE OF MANUFACTURING, PROCESSING OR

PRODUCING ARTICLES OR THINGS OR FOR THE PURPOSE GENERATION OF

POWER AND NOT FOR TRADING PURPOSE.

sreekanth (Assistant Manager- Taxation) 06 December 2013

Section 206C Deals with "Tax Collection at Source", Where Tax Is Collected by the Seller from the Buyer for 'Specified Goods'.

This is A mechanism under Income Tax Act & the Seller Who Deduct Tax from the Buyer Remits to the Govt and Issues "TCS Certiticate" (Just like TDS Certificate).

This can be Claimed by the buyer against His "Income Tax Payable" at the Year end while Filing Income Tax Return. This TCS cannot be Adjusted against Service Tax/ Vat.

Refer this Link, Which explains Everything about 'Tax Collection at Source' (TCS) Link:https://www.exploreincometax.com/Income-tax-Ready-Reckoners/tcs-rates-tcs-compliances

You Can Also Refer Bare Act of this Section 206C on Link:https://www.exploreincometax.com/Indian-Income-tax-Act-1961/Section-206C