Article
TCS on sale of goods – Practical nightmare
By S. Sriram
Sub-section (1H) introduced in Section 206 of the Income-tax Act, 1961 by the Finance Act, 2020, seeks to extend the ambit of Tax Collection at Source (‘TCS’) to consideration received from sale of goods. The article in this issue of Direct Tax Amicus seeks to address certain practical issues that would be faced by tax payers in following the law effective from 1-10-2020. The author believes that the meaning of goods’ to be used in the Income-tax Act must be derived from the Sale of Goods Act, 1930 and not from Central Goods and Services Tax Act, 2017. According to him, while the word ‘goods’ has been judicially interpreted to include shares, electricity, licenses and scrips, canned software incorporated in a media, etc., doubts exist on coverage of foreign currencies, forward contracts, derivatives, and other financial instruments. On the question of point of collection, the article states that the provisions would have to be interpreted in a manner to make it applicable on a date as close to the date on which taxable income accrues. The article also elaborately discusses ‘consideration for the sale’, situation when the buyer is unknown, and applicability on transactions covered within other section...
Notifications and Circulars
- Pension funds – Additional conditions notified to qualify for exemption under Section 10(23FE)
- Banks to refund charges collected, from 01-01-2020, on prescribed electronic modes under Section 269SU
- Faceless Assessment Scheme – Guidelines for implementation of issued
Ratio decidendi
- Capital gains on compulsory land acquisition would be taxable in the year of awarding of compensation – Supreme Court
- Exchange of shares held as stock-in-trade to be taxable as business income – Delhi High Court
- Interest paid to creditors allowable under Section 57 on establishment of nexus between interest earned and expended; Indexation benefit on long term capital gains available while arriving at book profits under Section 115JB – Karnataka High Court
- Denial of TDS credit without assigning reasons in intimation under Section 143(1) is not sustainable – ITAT Delhi
- Renovation expenses on ‘new house’ amounts to construction and hence eligible for deduction under Section 54F – ITAT Hyderabad
- Power to rectify an order not to be exercised when issue highly debatable – ITAT Chandigarh
