TCS is to be collected by the seller from the buyer on sale of specified category of goods at rates in force. Initially, only specified items (such as alcoholic liquor for human consumption, tendu leaves, scrap, mineral being coal or lignite or iron ore, etc.) were within the TCS net. Subsequently, the Finance Act, 2012 provided for collection of TCS on sale of bullion and jewellery where the sale consideration received in cash–
a) for bullion, exceed Rs 2,00,000; or
b) for jewellery, exceed Rs 5,00,000.
The Finance Act, 2016 amended Section 206C to provide that seller is also required to collect TCS on sale of any goods (other than bullion or jewellery) or services where the sale consideration received in cash exceeds Rs 2,00,000.
Subsequent to the amendment, a number of representations were received from various stakeholders with regard to scope of the provisions and the procedure to be followed in case of the amended provisions of Section 206C. Now the CBDT has clarified the issue regarding applicability of the provisions of TCS where sale consideration is partly received in cash and partly in cheque as under:
1) No TCS will be levied if the cash receipt does not exceed Rs 2,00,000 even if the sale consideration exceeds Rs 2,00,000
2) TCS is required to be collected on cash component of sales consideration and not on whole of the sales consideration.