Section 206C of Income Tax Act "Profits and gains from the business of trading in alcoholic liquor, forest produce, scrap, etc"
206C. (1) 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 of any goods of the nature specified in column (2) of the Table below, a sum equal to the percentage, specified in the corresponding entry in column (3) of the said Table, of such amount as income-tax:
|
S No |
Nature of Goods |
Percentage |
|
(i) |
Alcoholic liquor for human consumption |
1% |
|
(ii) |
Tendu Leaves |
5% |
|
(iii) |
Timber obtained under forest lease |
2.5% |
|
(iv) |
Timber obtained by any mode other than under a forest lease |
2.5% |
|
(v) |
Any other forest produce not being timber or tendu leaves |
2.5% |
|
(vi) |
Scrap |
1% |
|
(vii) |
Minerals, being coal or lignite or iron ore |
1% |
Provided that every person, being a seller shall at the
time, during the period beginning on the 1st day of June,
2003 and ending on the day immediately preceding the date on
which the Taxation Laws (Amendment) Act, 2003 comes into
force, of debiting of the amount payable by the buyer to the
account of the buyer or 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 of any goods of the nature specified in column (2) of
the Table as it stood immediately before the 1st day of
June, 2003, a sum equal to the percentage, specified in the
corresponding entry in column (3) of the said Table, of such
amount as income-tax in accordance with the provisions of
this section as they stood immediately before the 1st day of
June, 2003.
(1A) Notwithstanding anything contained in sub-section (1),
no collection of tax shall be made in the case of a buyer,
who is resident in India, if such buyer furnishes to the
person responsible for collecting tax, a declaration in
writing in duplicate in the prescribed form and verified in
the prescribed manner to the effect that the goods referred
to in column (2) of the aforesaid Table are to be utilised
for the purposes of manufacturing, processing or producing
articles or things or for the purposes of generation of
power and not for trading purposes.
(1B) The person responsible for collecting tax under this
section shall deliver or cause to be delivered to the
Principal Chief Commissioner or Chief Commissioner or
Principal Commissioner or Commissioner one copy of the
declaration referred to in sub-section (1A) on or before the
seventh day of the month next following the month in which
the declaration is furnished to him.
(1C) Every person, who grants a lease or a licence or enters
into a contract or otherwise transfers any right or interest
either in whole or in part in any parking lot or toll plaza
or mine or quarry, to another person, other than a public
sector company (hereafter in this section referred to as
"licensee or lessee") for the use of such parking lot or
toll plaza or mine or quarry for the purpose of business
shall, at the time of debiting of the amount payable by the
licensee or lessee to the account of the licensee or lessee
or at the time of receipt of such amount from the licensee
or lessee in cash or by the issue of a cheque or draft or by
any other mode, whichever is earlier, collect from the
licensee or lessee of any such licence, contract or lease of
the nature specified in column (2) of the Table below, a sum
equal to the percentage, specified in the corresponding
entry in column (3) of the said Table, of such amount as
income-tax:
| S No | Nature of Contract or licence or lease etc | Percentage |
| (i) | Parking Lot | 2% |
| (ii) | Toll Plaza | 2% |
| (iii) | Mining and Quarrying | 2% |
Explanation 1.-For the purposes of this sub-section,
"mining and quarrying" shall not include mining and
quarrying of mineral oil.
Explanation 2.-For the purposes of Explanation 1, "mineral
oil" includes petroleum and natural gas.
(1D) [***]
(1E) [***]
(1F) Every person, being a seller, who receives any amount
as consideration for sale of a motor vehicle of the value
exceeding ten lakh rupees, shall, at the time of receipt of
such amount, collect from the buyer, a sum equal to one per
cent of the sale consideration as income-tax.
90[(1G) Every person,-
(a) being an authorised dealer, who receives an amount, for
remittance out of India from a buyer, being a person
remitting such amount out of India under the Liberalised
Remittance Scheme of the Reserve Bank of India;
(b) being a seller of an overseas tour program package, who
receives any amount from a buyer, being the person who
purchases such package,
shall, at the time of debiting the amount payable by the
buyer or at the time of receipt of such amount from the said
buyer, by any mode, whichever is earlier, collect from the
buyer, a sum equal to five per cent of such amount as
income-tax:
Provided that the authorised dealer shall not collect the
sum, if the amount or aggregate of the amounts being
remitted by a buyer is less than seven lakh rupees in a
financial year and is for a purpose other than purchase of
overseas tour program package:
Provided further that the sum to be collected by an
authorised dealer from the buyer shall be equal to five per
cent of the amount or aggregate of the amounts in excess of
seven lakh rupees remitted by the buyer in a financial year,
where the amount being remitted is for a purpose other than
purchase of overseas tour program package:
Provided also that the authorised dealer shall collect a sum
equal to one half per cent of the amount or aggregate of the
amounts in excess of seven lakh rupees remitted by the buyer
in a financial year, if the amount being remitted out is a
loan obtained from any financial institution as defined in
section 80E, for the purpose of pursuing any education:
Provided also that the authorised dealer shall not collect
the sum on an amount in respect of which the sum has been
collected by the seller:
Provided also that the provisions of this sub-section shall
not apply, if the buyer is,-
(i) liable to deduct tax at source under any other provision
of this Act and has deducted such amount;
(ii) the Central Government, a State Government, an embassy,
a High Commission, a legation, a commission, a consulate,
the trade representation of a foreign State, a local
authority as defined in the Explanation to clause (20) of
section 10 or any other person as the Central Government
may, by notification in the Official Gazette, specify for
this purpose, subject to such conditions as may be specified
therein.
Explanation.-For the purposes of this sub-section,-
(i) "authorised dealer" means a person authorised by the
Reserve Bank of India under sub-section (1) of section 10 of
the Foreign Exchange Management Act, 1999 (42 of 1999) to
deal in foreign exchange or foreign security;
(ii) "overseas tour programme package" means any tour
package which offers visit to a country or countries or
territory or territories outside India and includes expenses
for travel or hotel stay or boarding or lodging or any other
expenditure of similar nature or in relation thereto.
(1H) Every person, being a seller, who receives any amount
as consideration for sale of any goods of the value or
aggregate of such value exceeding fifty lakh rupees in any
previous year, other than the goods being exported out of
India or goods covered in sub-section (1) or sub-section
(1F) or sub-section (1G) shall, at the time of receipt of
such amount, collect from the buyer, a sum equal to 0.1 per
cent of the sale consideration exceeding fifty lakh rupees
as income-tax:
Provided that if the buyer has not provided the Permanent
Account Number or the Aadhaar number to the seller, then the
provisions of clause (ii) of sub-section (1) of section
206CC shall be read as if for the words "five per cent", the
words "one per cent" had been substituted:
Provided further that the provisions of this sub-section
shall not apply, if the buyer is liable to deduct tax at
source under any other provision of this Act on the goods
purchased by him from the seller and has deducted such
amount.
Explanation.-For the purposes of this sub-section,-
(a) "buyer" means a person who purchases any goods, but does
not include,-
(A) the Central Government, a State Government, an embassy,
a High Commission, legation, commission, consulate and the
trade representation of a foreign State; or
(B) a local authority as defined in the Explanation to
clause (20) of section 10; or
(C) a person importing goods into India or any other person
as the Central Government may, by notification in the
Official Gazette, specify for this purpose, subject to such
conditions as may be specified therein;
(b) "seller" means a person whose total sales, gross
receipts or turnover from the business carried on by him
exceed ten crore rupees during the financial year
immediately preceding the financial year in which the sale
of goods is carried out, not being a person as the Central
Government may, by notification in the Official Gazette,
specify for this purpose, subject to such conditions as may
be specified therein.
(1-I) If any difficulty arises in giving effect to the
provisions of sub-section (1G) or sub-section (1H), the
Board may, with the approval of the Central Government,
issue guidelines for the purpose of removing the difficulty.
(1J) Every guideline issued by the Board under sub-section
(1-I) shall be laid before each House of Parliament, and
shall be binding on the income-tax authorities and on the
person liable to collect the sum.]
(2) The power to recover tax by collection under 91[this
section] shall be without prejudice to any other mode of
recovery.
(3) Any person collecting any amount under 91[this section]
shall pay within the prescribed time the amount so collected
to the credit of the Central Government or as the Board
directs :
Provided that the person collecting tax on or after the 1st
day of April, 2005 in accordance with the foregoing
provisions of this section shall, after paying the tax
collected to the credit of the Central Government within the
prescribed time, prepare such statements for such period as
may be prescribed and deliver or cause to be delivered to
the prescribed income-tax authority, or the person
authorised by such authority, such statement in such form
and verified in such manner and setting forth such
particulars and within such time as may be prescribed.
(3A) In case of an office of the Government, where the
amount collected under sub-section (1) or sub-section (1C)
has been paid to the credit of the Central Government
without the production of a challan, the Pay and Accounts
Officer or the Treasury Officer or the Cheque Drawing and
Disbursing Officer or any other person, by whatever name
called, who is responsible for crediting such tax to the
credit of the Central Government, shall deliver or cause to
be delivered to the prescribed income-tax authority, or to
the person authorised by such authority, a statement in such
form, verified in such manner, setting forth such
particulars and within such time as may be prescribed.
(3B) The person referred to in the proviso to sub-section
(3) may also deliver to the prescribed authority under the
said proviso, a correction statement for rectification of
any mistake or to add, delete or update the information
furnished in the statement delivered under the said proviso
in such form and verified in such manner, as may be
specified by the authority.
(4) Any amount collected in accordance with the provisions
of this section and paid to the credit of the Central
Government shall be deemed to be a payment of tax on behalf
of the person from whom the amount has been collected and
credit shall be given to such person for the amount so
collected in a particular assessment year in accordance with
the rules as may be prescribed by the Board from time to
time.
(5) Every person collecting tax in accordance with the
provisions of this section shall within such period as may
be prescribed from the time of debit or receipt of the
amount furnish to the buyer or licensee or lessee to whose
account such amount is debited or from whom such payment is
received, a certificate to the effect that tax has been
collected, and specifying the sum so collected, the rate at
which the tax has been collected and such other particulars
as may be prescribed :
Provided that the prescribed income-tax authority or the
person authorised by such authority referred to in
sub-section (3) shall, within the prescribed time after the
end of each financial year beginning on or after the 1st day
of April, 2008, prepare and deliver to the buyer referred to
in sub-section (1) or, as the case may be, to the licensee
or lessee referred to in sub-section (1C), a statement in
the prescribed form specifying the amount of tax collected
and such other particulars as may be prescribed.
(5A) Every person collecting tax before the 1st day of
April, 2005 in accordance with the provisions of this
section shall prepare within the prescribed time after the
end of each financial year, and deliver or cause to be
delivered to the prescribed income-tax authority or such
other authority or agency as may be prescribed such returns
in such form and verified in such manner and setting forth
such particulars and within such time as may be prescribed:
Provided that the Board may, if it considers necessary or
expedient so to do, frame a scheme for the purposes of
filing such returns with such other authority or agency
referred to in this sub-section.
(5B) Without prejudice to the provisions of sub-section
(5A), any person collecting tax, other than in a case where
the seller is a company, the Central Government or a State
Government, may at his option, deliver or cause to be
delivered such return to the prescribed income-tax authority
in accordance with such scheme as may be specified by the
Board in this behalf, by notification in the Official
Gazette, and subject to such conditions as may be specified
therein, on or before the prescribed time after the end of
each financial year, on a floppy, diskette, magnetic
cartridge tape, CD-ROM or any other computer readable media
(hereinafter referred to as the computer media) and in the
manner as may be specified in that scheme:
Provided that where the person collecting tax is a company
or the Central Government or a State Government, such person
shall, in accordance with the provisions of this section,
deliver or cause to be delivered, within the prescribed time
after the end of each financial year, such returns on
computer media under the said scheme.
(5C) Notwithstanding anything contained in any other law for
the time being in force, a return filed on computer media
shall be deemed to be a return for the purposes of
sub-section (5A) and the rules made thereunder and shall be
admissible in any proceedings made thereunder, without
further proof of production of the original, as evidence of
any contents of the original or of any facts stated therein.
(5D) Where the Assessing Officer considers that the return
delivered or caused to be delivered under sub-section (5B)
is defective, he may intimate the defect to the person
collecting tax and give him an opportunity of rectifying the
defect within a period of fifteen days from the date of such
intimation or within such further period which, on an
application made in this behalf, the Assessing Officer may,
in his discretion, allow; and if the defect is not rectified
within the said period of fifteen days or, as the case may
be, the further period so allowed, then, notwithstanding
anything contained in any other provision of this Act, such
return shall be treated as an invalid return and the
provisions of this Act shall apply as if such person had
failed to deliver the return.
(6) Any person responsible for collecting the tax who fails
to collect the tax in accordance with the provisions of this
section, shall, notwithstanding such failure, be liable to
pay the tax to the credit of the Central Government in
accordance with the provisions of sub-section (3).
(6A) If any person responsible for collecting tax in
accordance with the provisions of this section does not
collect the whole or any part of the tax or after
collecting, fails to pay the tax as required by or under
this Act, he shall, without prejudice to any other
consequences which he may incur, be deemed to be an assessee
in default in respect of the tax:
Provided that any person responsible for collecting tax
92[in accordance with the provisions of sub-section (1) and
sub-section (1C)], who fails to collect the whole or any
part of the tax on the amount received from a buyer or
licensee or lessee or on the amount debited to the account
of the buyer or licensee or lessee shall not be deemed to be
an assessee in default in respect of such tax if such buyer
or licensee or lessee-
(i) has furnished his return of income under section 139;
(ii) has taken into account such amount for computing income
in such return of income; and
(iii) has paid the tax due on the income declared by him in
such return of income,
and the person furnishes a certificate to this effect from
an accountant in such form as may be prescribed:
Provided further that no penalty shall be charged under
section 221 from such person unless the Assessing Officer is
satisfied that the person has without good and sufficient
reasons failed to collect and pay the tax.
(7) Without prejudice to the provisions of sub-section (6),
if the person responsible for collecting tax does not
collect the tax or after collecting the tax fails to pay it
as required under this section, he shall be liable to pay
simple interest at the rate of one per cent per month or
part thereof on the amount of such tax from the date on
which such tax was collectible to the date on which the tax
was actually paid and such interest shall be paid before
furnishing the quarterly statement for each quarter in
accordance with the provisions of sub-section (3):
Provided that in case any person responsible for collecting
tax in accordance with the provisions of this section, fails
to collect the whole or any part of the tax on the amount
received from a buyer or licensee or lessee or on the amount
debited to the account of the buyer or licensee or lessee
but is not deemed to be an assessee in default under the
first proviso of sub-section (6A), the interest shall be
payable from the date on which such tax was collectible to
the date of furnishing of return of income by such buyer or
licensee or lessee.
(8) Where the tax has not been paid as aforesaid, after it
is collected, the amount of the tax together with the amount
of simple interest thereon referred to in sub-section (7)
shall be a charge upon all the assets of the person
responsible for collecting tax.
(9) Where the Assessing Officer is satisfied that the total
income of the buyer or licensee or lessee justifies the
collection of the tax at any lower rate than the relevant
rate specified in sub-section (1) or sub-section (1C), the
Assessing Officer shall, on an application made by the buyer
or licensee or lessee in this behalf, give to him a
certificate for collection of tax at such lower rate than
the relevant rate specified in sub-section (1) or
sub-section (1C).
(10) Where a certificate under sub-section (9) is given, the
person responsible for collecting the tax shall, until such
certificate is cancelled by the Assessing Officer, collect
the tax at the rates specified in such certificate.
92a[(10A) In case the provisions of sub-section (1) [except
the goods referred at serial number (i) in the TABLE], (1C),
(1F) or (1H) require collection of tax at source during the
period commencing from the 14th day of May, 2020 to the 31st
day of March, 2021, then, notwithstanding anything contained
in these sub-sections the collection of tax shall be made at
the rate being the three-fourth of the rate specified in
these sub-sections.]
(11) The Board may, having regard to the convenience of
assessees and the interests of revenue, by notification in
the Official Gazette, make rules specifying the cases in
which, and the circumstances under which, an application may
be made for the grant of a certificate under sub-section (9)
and the conditions subject to which such certificate may be
granted and providing for all other matters connected
therewith.
Explanation.-For the purposes of this section,-
(a) "accountant" shall have the meaning assigned to it in
the Explanation to sub-section (2) of section 288;
(aa) "buyer" with respect to-
(i) sub-section (1) 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) a public sector company, the Central Government, a State
Government, and an embassy, a High Commission, legation,
commission, consulate and the trade representation, of a
foreign State and a club; or
(B) a buyer in the retail sale of such goods purchased by
him for personal consumption;
(ii) [***]
(iii) sub-section (1F) means a person who obtains in any
sale, goods of the nature specified in the said sub-section,
but does not include,-
(A) the Central Government, a State Government and an
embassy, a High Commission, legation, commission, consulate
and the trade representation of a foreign State; or
(B) a local authority as defined in Explanation to clause
(20) of section 10; or
(C) a public sector company which is engaged in the business
of carrying passengers.
(ab) [***]
(b) "scrap" means waste and scrap from the manufacture or
mechanical working of materials which is definitely not
usable as such because of breakage, cutting up, wear and
other reasons;
(c) "seller" 93[with respect to sub-section (1) and
sub-section (1F)] means the Central Government, a State
Government or any local authority or corporation or
authority established by or under a Central, State or
Provincial Act, or any company or firm or co-operative
society and also includes an individual or a Hindu undivided
family whose total sales, gross receipts or turnover from
the business or profession carried on by him exceed 94[one
crore rupees in case of business or fifty lakh rupees in
case of profession] during the financial year immediately
preceding the financial year in which the goods of the
nature specified in the Table in sub-section (1) are sold.