Goods covered under TCS provisions and Applicable Rates

When the below-mentioned goods are utilized for the purpose of manufacturing, processing, or producing things, the taxes are not payable. If the same goods are utilized for trading purposes, then tax is payable.   The tax payable is collected by the seller at the point of sale.

The following tax rates are applicable for each type of good:

• Liquor of alcoholic nature, made for consumption by humans: 1%
• Timber wood under a forest leased: 2.5%
• Tendu leaves: 5%
• Timber wood by any other mode than forest leased: 2.5%
• Any forest produce other than Tendu leaves and timber: 2.5%
• Scrap: 1%
• Minerals like lignite, coal and iron ore: 1%
• Bullion that exceeds over Rs. 2 lakhs/ Jewellery that exceeds over Rs. 5 lakhs: 1%
• Purchase of Motor vehicle exceeding Rs. 10 Lakhs: 1%
• Parking lot, Toll Plaza and Mining and Quarrying: 2%

 TCS Exemptions

Tax collection at source is exempted in the following cases:

1. When the eligible goods are used for personal consumption
2. The purchaser buys the goods for manufacturing, processing or production and not for the purpose of trading of those goods.

TCS under GST

1. Any dealer or traders selling goods online would get the payment from the online platform after deducting an amount tax @ 1 % under IGST Act. (0.5% in CGST & 0.5% in SGST)
2. The tax would have to be deposited to the government by 10th of the next month.
3. All the dealers/traders are required to get registered under GST compulsorily.
4. These provisions are effective from 1st Oct 2018.

Example: Mr. Raj (seller) is a trader who sells clothes online on Flipkart (buyer). He receives an order for Rs 10, 000 inclusive of tax and commission. Flipkart would thus be deducting tax for Rs 100 (1% of Rs. 10000).