Please Help: 206C
Posted Date : 26-Nov-2011 , 08:05:55 pm | Posted By: Puneet Garg
Category :
Income Tax | Answers :
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What are the conditions for applicability of TCS on trading of timber? |
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Answers:
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 Answer by: Ashish Karundia |
| Dear Puneet,
In respect to timber-forest lease/timber -any other mode, Section 206 (1) of Income Tax Act, 1961 provides that every person, being a seller shall, at the time of debiting of the amount payable by the buyer to the account of the buyer or at the time of receipt of such amount from the said buyer in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, collect from the buyer a sum equal to the 2.5%.
Further, Explanation (a) (ii) to section 206 provides that 'buyer' means a person who obtains in any sale, by way of auction, tender or any other mode, goods of the nature specified in the Table in sub-section (1) or the right to receive any such goods but does not include a buyer in the retail sale of such goods purchased by him for personal consumption.
In other words, TCS provisions in respect of Timber will be applicable only till whole seller stage. Thus, if you are into trading of timber to ultimate consumer, then in such cases TCS provisions would not apply.
Hope the above suffice.
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| Answer by: CA VIPIN GARG |
| Dear Puneet if you are in just trading of the timber then, there will be no TCS provisions are applicable, hope you got the answer you were looking for, Have a nice day dear...........
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