TCS on sale of Goods- Section 206C(1H) w.e.f. from 01.10.2020 : Overview with Illustrations

To widen and deepen the scope of early collection of revenue to the Government, Finance Bill, 2020 brought in levy of TCS (0.1% or 1% in case PAN/Aadhaar not provided by Buyer) on sale of goods for which sales consideration. Sub section 1H has been inserted in Section 206C by Finance Act, 2020 for collection of TCS by the seller on sale of ANY GOODS. This means it is not applicable to any specified goods but to all goods.

Please note that TCS Rate is been reduced to 0.075% for the period from 01.10.2020 to 31.03.2021 due to the COVID-19 pandemic

WHO HAS TO COLLECT??

TCS to be collected by seller. Seller means a person whose total sales, gross receipts or turnover from the business carried on by him exceed Rs.10 crore during the financial year immediately preceding the financial year in which the sale of goods is carried out, not being a person as the Central Govt. may, by notification in the Official Gazette, specify for this purpose, subject to such conditions as may be specified therein

WHOM TO COLLECT TCS FROM??

TCS to be collected from such buyers to whom value or aggregate value of goods sold exceeds fifty lakh rupees in a previous year.

Note 1: For the purpose of calculating threshold of Rs. 10 crores total sales, gross receipts or turnover from the business is to be taken into consideration i.e. sale of goods and services both shall be considered for calculating threshold of Rs.10 crores.

Note 2: For the purpose of calculating threshold of Rs. 50 Lakhs only sale of goods is to be taken into consideration.

TIME OF COLLECTION OF TCS??

TCS is to be collected at the time of actual receipt of consideration by the seller.

Note 3: In my personal opinion TCS should be collected in the 'sales invoice' itself so as to enable buyer to know about the applicability of levy. Merely charging TCS in sales invoice does not trigger liability for payment. TCS liability is to be discharged only when the sales consideration for sales effected on or after 01-10-2020 is received.

EXCLUSION- WHEN TCS IS NOT APPLICABLE??

1) TCS provisions are not applicable on Export of Goods.

2) TCS provisions are not applicable where buyer is CG, SG, Local authority, Embassy, Commission or Consulate etc

3) TCS provisions are not applicable on sale of goods which are already covered under other sub-sections of S.206C viz. Liquor / Scrap sales, Motor Vehicles etc.

4) TCS provisions are not applicable where buyer is required to deduct TDS on such purchases

Applicability of Provisions in Transitional period:

Before moving towards the illustrations, let us understand the Application of the provision during the transitional period

Sl. No	Date of completion of sale	Date of receipt of sale consideration	Remarks
1	Before 1.10.2020	Before 1.10.2020	No TCS is to be collected since section 206C(1H) is made applicable from 1st October, 2020
2	On or after 1.10.2020	On or after 1.10.2020	TCS to be collected at prescribed rate subject to threshold limit
3	Before 1.10.2020	On or after 1.10.2020	Since sales were carried out in the period when provisions of section 206C(1H) were not applicable, therefore, this sub-section shall not get triggered on receipt of amount from debtors standing in books as on 30.9.2020
4	On or after 1.10.2020	Before 1.10.2020	Advance payments cannot be considered as ‘consideration for sale of any goods. Advance payments are payments received against ‘agreement to sell’ only. Section 206C(1H) will get triggered when such advance shall be appropriated against sale after completion of sale. Therefore, in this case TCS will be collected by the seller.

 

Illustrations: For better understanding let us take a look on the following illustrative

Seller: Rohit Manufacturing Pvt Ltd. (Assume T/o exceeds 10Cr in PY 19-20 and 100% Sale is on Cash Basis i.e no Credit Sale. Further receipts are on FIFO Basis)

Buyer: Kiara Automobile Pvt Ltd.: Assume PAN has been provided to Seller

S.NO	Sales up to 30-09-2020	Sales after 01-10-2020	Sales consid-eration received up to 30-09-2020	Sales consid-eration received on or after 01-10-2020	Whether TCS is appli-cable for FY 2020- 2021? (YES / NO)	Sales consid-eration (exce-eding INR 50,00,000) on which TCS is payable	TCS Liability @ 0.075% / 0.75%	Remarks
1	18 Lac	72 Lac	15 Lac	65 Lac	Yes	27 Lac	2,025	Rs. 300000 receipt post received post 30.09.2020 pertaining to period prior to 30.09.2020 will not attract TCS
2.	52 Lac	45 Lac	52 Lac	45 Lac	Yes	45 Lac	3,375	Limit of INR 50 Lakhs already exceeded prior to 30-09-2020. Hence, each sales consideration received for sales made after 01-10-2020 is liable for TCS.
3.	58 Lac	56 Lac	3 Lac	51 Lac	No	-	-	Receipts are from outstanding as on 30-09-2020 and consideration not received for sales effected after 01-10-2020 hence, TCS is not payable.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

           

STEPS TO USE OFFLINE UTILITY TO COMPARE AUTO DRAFTED ITC IN GSTR 2B WITH PURCHASE REGISTER

The Central Board of Indirect Taxes and Customs ( CBIC ) has enabled the Matching Offline Tool to compare ITC auto-drafted in Form GSTR-2B with Purchase Register. An offline tool has been made available to the taxpayers to match Input Tax Credit (ITC), as auto-populated in their Form GSTR-2B, with their purchase register. This tool will help the taxpayer to compare their ITC as per their Purchase Register, with the ITC as shown available in their auto-drafted Form GSTR-2B, and thus help them to claim correct ITC while filing Form GSTR-3B. To use the Matching Offline Tool, taxpayer need to : 1) Download and install the Offline tool on their system. 2) Download the Form GSTR-2B JSON file from the GST portal. 3) Prepare purchase register in the template provided with offline tool 4) The total number of documents to match should preferably be less than 3000 in number 5) Steps to use the utility: Download the utility from GST common portal by navigating to Downloads>Offline Tools> Matching Offline Tool Open the tool. The following boxes are displayed on the Offline tool dashboard page: a) GSTR-2B b) Import Purchase Register (PR) c) Matching Result 6) Import the GSTR-2B JSON file, downloaded from the GST portal into the tool, by tab ‘Open downloaded JSON file’ and use it to view the same. 7) Import the purchase register data, maintained in the template provided with offline tool, using Excel or CSV format, from Import Purchase Register (PR) tile. 8) Click on the ‘Match’ button to match the above two details (c & d). The utility will match the table-wise details based on the criteria for matching selected. Note: 9) The ‘Match’ button will be enabled only if the purchase register has been successfully imported into the tool 10) The matching is done on the basis of GSTIN, Document type, Document number, Document date, taxable value, total tax amount and tax amounts head wise 11) Post matching, the user will be navigated to the ‘Matching Result’ page and the matching result will be summarized as Exact match, Partial match, Probable match, or Unmatched. 12) Once matching is complete, the taxpayer can: a) Refine matching result b) View summary of the matching result c) Export the matching details to CSV file d) Download the matching result details in excel format from offline utility. CA ROHIT KAPOOR
Contact: +91 9899218725
Email: connectwithcarohitkapoor@gmail.com

NO EXTENSION OF DUE DATES OF ITRs AND TAX AUDIT DUE DATES

The amended taxation bill passed by loksabha. The ambiguity of language created an impression that dates for filing ITRs etc has been extended. However that is not true. 

The bill starts from third proviso of section 3 which is as under:

“Provided also that where the specified Act is the Income-tax Act, 1961 and the compliance relates to—

(i) furnishing of return under section 139 thereof, for the assessment year commencing on the—

(a) 1st day of April, 2019, the provision of this sub-section shall have the effect as if for the figures, letters and words “31st day of March, 2021”, the figures, letters and words “30th day of September, 2020” had been substituted;

(b) 1st day of April, 2020, the provision of this sub-section shall have the effect as if for the figures, letters and words “31st day of March, 2021”, the figures, letters and words “30th day of November, 2020” had been substituted;

(vii) furnishing of report of audit under any provision thereof for the assessment year commencing on the 1st day of April, 2020, the provision of this sub-section shall have the effect as if for the figures, letters and words “31st day of March, 2021”, the figures, letters and words “31st day of October, 2020” had been substituted:“

 

Now after reading the above amendments many believed for once that due date have been extended to 31 March 2021 for all income tax returns and tax audit reports.

However, that’s not true. If one reads the above bill carefully the first sub section extends all the due date between 20 March 2020 to 31 December 2020 to 31 March 2021 whereas the next proviso clarifies that for various due dates shall not extend to 31 March 2021 where it will extend to some specific date. For eg:

1. Due date for return of A.Y. 2019-20 will be 30 September 2020 instead of 31 March 2021.

2. Due date for return of A.Y. 2020-21 u/s 139(1) will be 30 November 2020 instead of 31 March 2021.

3. Due date for tax audit report for A.Y. 2020-21 will be 31 October 2020 instead of 31 March 2021.

Thus there is no extension as on 19 September 2020 for ITR filing or Tax Audit Due date.



CA ROHIT KAPOOR
Contact: +91 9899218725
Email: connectwithcarohitkapoor@gmail.com

BILL 116 OF 2020- THE TAXATION AND OTHER LAWS (RELAXATION AND AMENDMENT OF CERTAIN PROVISIONS) BILL, 2020             


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New Guidelines issued for conducting exams by the Health Ministry

1.Generic preventive measures 

The generic measures include simple public health measures that are to be followed to reduce the risk of COVID-19. These measures need to be observed by all (staff, students and parents) in these places at all times.

These include:

i. Physical distancing of at least 6 feet to be followed as far as feasible.

ii. Use of face covers/masks to be made mandatory.

iii. Practice frequent hand washing with soap (for at least 40 -60 seconds) even when hands are not visibly dirty. Use of alcohol-based hand sanitizers (for at least 20 seconds) can be made wherever feasible.

iv. Respiratory etiquette to be strictly followed. This involves strict practice of covering one's mouth and nose while coughing/sneezing with a tissue/handkerchief/flexed elbow and disposing off used tissues properly.

v. Self-monitoring of health by all and reporting any illness at the earliest. vi. Spitting shall be strictly prohibited.

vii. Installation & use of Aarogya Setu App shall be advised to all, as far as feasible.

 2. All Universities / Educational Institutions / Examination Conducting Authorities / Examination centers shall specifically ensure the following arrangements:



i. Only those examination centers which are outside the containment zone shall be allowed to function. Staff/examinees from containment zones shall not be permitted. Such examinees shall be given an opportunity to undertake the examination through other means or the Universities/Educational Institution/ Agency may consider appropriate measures in this regard.

ii. Universities/ Educational Institutions/ Examination Conducting Authorities/ Examination centers may plan out the examination schedule in a staggered manner so as to avoid overcrowding at any examination center on any day.

iii. Keeping in view the physical distancing norms, institutions should have adequate room capacity to ensure proper seating arrangement for examination.

iv. Appropriate arrangements for personal protection gears like face covers/masks, and other logistic like hand sanitizers, soap, sodium hypochlorite solution etc. shall be made available by Universities/ Educational Institutions/Examination Conducting Authorities/Examination centers to the staff as well as students as per requirements.

v. Exam functionary and examinees may also submit self-declaration about health status at the time of entrance to the examination center. Such self-declaration form may be circulated at the time of issue of admit tickets. A simple do's and dont's/ Advisory may also be circulated at the time of issue of admit tickets.

vi. Students should also be given prior information on what they should carry,which includes exam related documents (Admit card, ID card etc) , face mask, water bottle, hand sanitizer etc.

vii. Adequate manpower shall be deployed by the Institution for maintaining discipline (to ensure observance to distancing norms and other preventive measures at all times) during conduct of the examination.

viii. Adequate number of registration rooms and manpower for document verification and recording of attendance shall be planned duly ensuring social distancing norms.

ix. Invigilators and supervisory staff need to be briefed on the code of conduct in the context of COVID.

x. Provisions must be made for display of Posters/standees/AV media on preventive measures about COVID-19 prominently at the examination center (outside and inside).

xi. The examination center should have a designated isolation room for isolating any person who is found symptomatic at the time of screening or during examination, till such time medical advice may be sought. A clear policy on allowing/disallowing symptomatic candidates to undertake examinations shall be delineated by the Examination Conducting Authorities in advance. 

System Computed GSTR 3B

System computed values of GSTR-1 Statement (Monthly filers), made available in Form GSTR-3B, as PDF statement on GST Portal

1. A pdf statement has been made available to taxpayers, filing monthly GSTR-1 statement, with system computed values of Table 3 of Form GSTR-3B. This PDF will be prepared on the basis of the values reported by them, in their GSTR-1 statement, for the said tax period.

Note: This facility will also be provided to quarterly GSTR-1 filers in due course of time.

2. This PDF will be available on their GSTR-3B dashboard, from tax period of August 2020 onwards, containing the information of GSTR-1 filed by them on or after 4th September 2020. This will make filing of their Form GSTR-3B easier for them.

3. This facility is provided to all taxpayers registered as a Normal taxpayer, SEZ Developer, SEZ unit and casual taxpayer.

4. Tables of Form GSTR 3B will be Auto-Drafted in pdf statement: Following Tables of Form GSTR-3B will be auto drafted, on basis of values reported in GSTR-1 statement, for the said period:

3.1(a) - Outward taxable supplies (other than zero rated, nil rated and exempted)

3.1(b) - Outward taxable supplies (zero rated)

3.1(c) - Other outward supplies (Nil rated, exempted)

3.1(e) - Non-GST outward supplies

3.2 - Supplies made to un-registered persons

3.2 - Supplies made to composition taxable persons

3.2 – Supplies made to UIN holders

5. In this, following points may be noted:

a) In case, any of the above values is negative as per GSTR-1 statement, those figures would be mentioned as Zero in the auto-drafted PDF and will not be carried forward to next period.

b)  Turnover & tax are computed after taking into account credit notes, debit notes, amendments and advances, if any.

c) Only filed GSTR-1 statements are considered for auto-population of the values in Form GSTR-3B.

6. This PDF is only for assistance of taxpayers to get the auto drafted values of Table 3 of their Form GSTR 3B (as per their filed GSTR 1 statement). Taxpayers, however, are required to verify & file their Form GSTR-3B, with correct values.

GST Due Dates falling in September 2020

 

1)  GSTR-1

GSTR-1 is a monthly or quarterly return that should be filed by every registered dealer. It contains details of all outward supplies i.e sales. The return has a total of 13 sections.

The due dates for GSTR-1 are based on your turnover. Businesses with sales of upto Rs. 1.5 crore have an option to file quarterly returns. Other taxpayers with sales above Rs. 1.5 crore have to file monthly return.

Periodicity	Period	Due Date
Monthly filings	August 2020	11-09- 2020
Quarterly filings	July 2020 to September, 2020	31-10- 2020

 

2) GSTR- 3B

GSTR-3B is a monthly self-declaration to be filed by a registered GST dealer along with GSTR 1 and GSTR 2 return forms. It is a simplified return to declare summary GST liabilities for a tax period. IMPORTANT: You have to file GSTR-3B even when there has been no business activity (nil return)

Turnover (in the preceding Financial Year)	Tax Period	Due Date	Date up to Which relaxation Provided	Interest*
Upto Rs. 5 Crore (Specified States-I)	May 2020	22-06- 2020	12-09- 2020	NIL up to  12-09- 2020, thereafter 9% till  3-09- 2020
Upto Rs. 5 Crore (Specified States-I)	June 2020	22-07- 2020	23-09-2020	NIL up to 23-09-2020, thereafter 9% till September 30, 2020
Upto Rs. 5 Crore (Specified States-I)	July 2020	22-08 2020	27-09- 2020	NIL up to 27-09-2020, thereafter 9% till 30-09-2020
Upto Rs. 5 Crore (Specified States-I)	August 2020	22-09- 2020	01-10-2020.	NIL upto 1-10- 2020
Upto Rs. 5 Crore (Specified Sates-II)	May 2020	24-06- 2020	15-09- 2020	NIL upto 15-09- 2020, thereafter 9% till 30-09-2020
Upto Rs. 5 Crore (Specified Sates-II)	June 2020	24-07- 2020	25-09-2020	NIL upto 25-09- 2020, thereafter 9% till 30-09-2020
Upto Rs. 5 Crore (Specified Sates-II)	July 2020	24-08- 2020	29-09-2020	NIL upto 29-09- 2020, thereafter 9% till 30-09-2020
Upto Rs. 5 Crore (Specified Sates-II)	August 20020	24-09- 2020	03-10-2020	NIL upto 03-10-2020
More than Rs. 5 Crore	August 2020	20-09- 2020	Not extended	-

Specified States-I 

Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana or Andhra Pradesh or the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep

Specified Sates-II

Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha or the Union territories of Jammu and Kashmir, Ladakh, Chandigarh and Delhi.

3) GSTR 5 and 5A

Every  registered non-resident taxable person is required to furnish a return in GSTR-5 in GST Portal. Non-Resident foreign taxpayers are those suppliers who do not have a business establishment in India and have come for a short period to make supplies in India. Such a person is required to furnish details of all taxable supplies in GSTR-5

 A Return in Form GSTR-5A has been prescribed which is to be furnished by the OIDAR service providers providing services to unregistered service recipients in India

Period	Due Date
August, 2020	20-09-2020

4) GSTR 6

Every Input Services Distributor is required to file a monthly return furnishing details of invoices on which credit has been received. The due date for filing of GSTR 6 as per GST Act is 13th of next month.

Period	Due Date
August, 2020	13-09-2020

 

 

5)  GSTR-7

GSTR-7 is a monthly return to be filed by the persons required to deduct TDS under the GST. Filing of GSTR 7 for a month is due on 10th of the following month.

Period	Due Date
August, 2020	10-09-2020

6) GSTR-8

GSTR-8 is a return to be filed by the e-commerce operators who are required to deduct TCS (Tax collected at source) under GST. GSTR-8 contains the details of supplies effected through e-commerce platform and amount of TCS collected on such supplies. GSTR-8 filing for a month is due on 10th of the following month.

Period	Due Date
August, 2020	10-09-2020

 

7) GSTR-9, 9A

GSTR 9 is an annual return to be filed yearly by taxpayers registered under GST. All taxpayers/taxable persons registered under GST must file their GSTR 9. However, the following are NOT required to file GSTR 9:

• Taxpayers opting composition scheme (They must file GSTR-9A)
• Casual Taxable Person
• Input service distributors
• Non-resident taxable persons
• Persons paying TDS under section 51 of CGST Act.
  
  GSTR-9 filing for businesses with turnover up to Rs 2 crore made optional for FY 17-18 and FY 18-19*

The GSTR-9A is the annual return to be filed once in a year by taxpayers who have opted for the Composition Scheme under GST for a particular financial year.

Period	Due Date
F.Y 2018-19	30-09-2020

8) GSTR- 9C

Every registered person whose aggregate turnover during a financial year exceeds two crore rupees shall get his accounts audited as specified under sub-section (5) of section 35 of the CGST Act, and shall furnish a copy of the audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C.

For businesses with an annual turnover of less than Rs 5 crore, filing of GSTR-9C for FY 2018-19 is waived off

Period	Due Date
F.Y 2018-19	30-09-2020