TCS (Tax Collected at Source)
A 0.1% income-tax collected by sellers on consideration received beyond Rs 50 lakh from a single buyer in a financial year.
Full definition
TCS, Tax Collected at Source, is a provision under Section 206C(1H) of the Indian Income Tax Act requiring sellers with turnover above Rs 10 crore to collect 0.1% tax from buyers once the cumulative sale to that buyer in a financial year crosses Rs 50 lakh. The seller deposits the collected amount with the government and files quarterly Form 27EQ returns.
For FMCG and dairy brands, TCS tracking is operationally fiddly because the threshold is per buyer and resets every 1 April. High-value distributors may cross the threshold in month three; low-volume ones may never cross it. Missing the trigger exposes the brand to interest and penalty.
Good invoice-billing software tracks cumulative YTD sales per buyer automatically, applies TCS starting from the invoice that breaches the threshold, and produces Form 27EQ-ready reports at quarter end.
Real-world example
A dairy brand's sales to Distributor X cross Rs 50 lakh in August. From the next invoice onwards, 0.1% TCS is added and collected.
Where it applies
Applicable industries
This term is relevant across the following SpireStock-supported industries.
How SpireStock handles it
Related SpireStock features
The concepts described above are implemented end-to-end in these product modules.
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