Section 394(1)

Every person, as specified in column C of the Table below

shall collect tax–

(a) on receipts specified in column B;

(b) at the rate as specified in column D; and

(c) at the time of

debiting of the amount payable by the buyer or licensee or lessee to the account of the buyer or licensee or lessee or

receipt of such amount from the said buyer or licensee or lessee in cash or by way of a cheque or a draft or any other mode,

which ever is earlier.

Nature of receipts has been specified from serial no. 1 to 9 which are as follows

Collection of tax in respect of receipts specified in s/s (1) (TSN 1 to 5)

SN

Nature of receipt

Person

Rate of TCS

A

B

C

D

1.

Sale of alcoholic liquor for human consumption.

Seller^[S-402(33)]

1%

2.

Sale of tendu leaves.

Seller.

5%

3.

Sale of

timber whether obtained under a forest lease or otherwise; or

any other forest produce (not being timber or tendu leaves) obtained under a forest lease.

Seller.

2%

4.

Sale of scrap^[S-402(31)].

Seller.

1%

5.

Sale of minerals, being coal or lignite or iron ore.

Seller.

1%

Section 394(2) read with Rule 212(1)

Irrespective of anything contained in s/s (1) (TSN 1 to 5),

the collection of tax shall not to be made in respect of receipts specified in S-394(1) [TSN 1 to 5]

in respect of the buyer, who is a resident in India,

if he furnishes a written declaration in duplicate in form 127

to the person responsible for collecting tax,

mentioning that such goods are to be utilised–

(a) for the purposes of manufacturing, processing or producing articles or things or for generating power; and

(b) not for trading purposes.

Extract of Rule 212(1)

Form No. 127 shall be verified in the manner indicated therein.

Section 394(3) read with Rule 212(3)

Where no collection of tax is to be made u/ss (2),

[Collector] the person responsible for collecting tax

shall deliver or cause to be delivered,

one copy of the declaration referred to in that sub-section,

to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner,

on or before the 7^th day of the month following the month of receipt of that declaration.

Rule 212(4)

For the purposes of sub-rule (3), the Chief Commissioner of Income-tax or the Commissioner of Income-tax means

the Chief Commissioner of Income-tax or Commissioner of Income-tax to whom the Assessing Officer, having jurisdiction to assess the person referred to in sub-rule (2), is subordinate.

Section 394(6)

For the purposes of this sub-section,

“forest produce” shall have the same meaning as defined in any State Act for the time being in force, or in the Indian Forest Act, 1927.

Collection of tax in respect of receipts specified in s/s (1) (TSN 6 to 9)

SN

Nature of receipt

Person

Rate of TCS

A

B

C

D

6.

Sale consideration exceeding Rs.10 lacs in case of—

(a) motor vehicle; or

(b) any other goods, as may be notified by CG.

Seller^[S-402(33)]

1%

7.

Remittance under the Liberalised Remittance Scheme

of an amount or aggregate of the amounts

exceeding Rs.10 lacs

Authorised dealer

(a) 5% for purposes of education or medical treatment;

(b) 20% for purposes other than education or medical treatment.

8.

Sale of “overseas tour programme package”^[S-402(26)]

including expenses for travel or hotel stay or boarding or lodging or any such similar or related expenditure.

Seller^[S-402(33)]

(a) 5% of amount or aggregate of amounts up to Rs.10 lacs;

(b) 20% of amount or aggregate of amounts exceeding Rs.10 lacs.

9.

Use of parking lot or toll plaza or mine or quarry for the purpose of business,

excluding mining and quarrying of mineral oil (including petroleum and natural gas).

Licensor or Lessor^[S-402(22)]

2%

Section 394(4)

The collection of tax shall not be made by the authorised dealer in respect of receipt specified in S-394(1) (TSN 7), —

(a) on such amount on which tax has been collected by the seller in respect of receipt referred to in S-394(1) (TSN 8);

(b) if the amount being remitted out is a loan obtained from any financial institution as defined in section 129(3)(b), for the purpose of pursuing any education.

Section 394(5)

The collection of tax shall not be made by the authorised dealer or seller, in respect of receipt specified in ss (1) (TSN 7 and 8),

if the buyer is liable to deduct tax at source under any other provisions of this Act and he has deducted such tax.