TCS under Section 206C(1H) Effective from 01.10.2020

TCS under Section 206C(1H) Effective from 01.10.2020

TCS under Section 206C(1H) Effective from 01.10.2020

If you are a seller whose turnover or gross receipts in previous financial year exceeds INR 10 Crore then effective 1 October 2020, a recently introduced section 206C(1H) regarding TCS (Tax Collected Source) becomes applicable on you.

Finance Act 2020 introduced section 206C(1H) which provides the seller of goods whose gross receipts or turnover in the preceding FY (FY 2019-20 in this case) exceeds INR 10 Crore is liable to collect TCS @ 0.1% (0.075% during the period 01-10-2020 to 31-03-2021 as a covid relief measure) from the parties to whom the sale of goods exceeds INR 50 Lakhs in the current financial year (FY 2020-21 in this case). Below goods shall not be considered for this section-

  1. Alcoholic Liquor for human consumption
  2. Tendu leaves
  3. Timber obtained under a forest lease
  4. Timber obtained by any mode other than under a forest lease
  5. Any other forest produce not being timber or tendu leaves
  6. Scrap
  7. Minerals, being coal or lignite or iron ore
  8. Toll Tickets;
  9. Cars;
  10. Goods Liable for TDS

However, in the case of no PAN or Aadhar of the customer, the TCS rate shall be 1%.

Please refer below a tabular explanation of the section-

Turnover or Gross Receipts in FY 19-20 > INR 10 Cr.
206C(1H) Applicable
206C(1H) NOT Applicable
Sale to any party in FY 20-21 > INR 50 Lakhs
TCS to be collected
TCS NOT to be collected
TCS Rate
PAN / Aadhar Available
PAN / Aadhar NOT Available
Goods sold to Central Govt, State Govt, Embassy, High Commission, Legation, Commission, Consulate, Local Authority or any person the Central Govt has authorised
Not Applicable
Not Applicable


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