India’s goods export will be exempt from new provision of tax collected at source (TCS), according to the finance ministry, which said it is not an additional tax. Fresh provision of TCS applicability for sale consideration of ?50 lakh or more came into effect from October 8. This was made in the union budget this year. The rate of TCS would be 0.1 per cent.
In a detailed clarification, the ministry mentioned various points apart from the exemption for export. In cases other than export, it said, TCS will be applicable only on the amount received on or after October 1.
Further, the seller in most of the cases maintains a running account of the buyer, in which payments are generally not linked with a particular sale invoice. Therefore, to simplify and ease the compliance of the collector, this provision shall be applicable on the amount of all sale consideration received on or after October 1 this year without making any adjustment for the amount received in respect of sales made before the said date.
To reduce the compliance burden, TCS is made applicable to only those sellers whose business turnover exceeds ?10 crore. In other words, those having turnover of less than ?10 crore will not be required to collect TCS.