TCS provisions u/s 206C(1G) don’t apply to NR-buyer who doesn’t have PE in India: CBDT
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- Last Updated on 20 August, 2022
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Notification No. 99/2022, dated 17-08-2022
Section 206C(1G) provides for the collection of tax at source (TCS) from remittance under Liberalized Remittance Scheme (LRS) and the sale of an overseas tour package. As per this provision, tax is required to be collected by:
a) An authorized dealer who receives an amount for remittance out of India under the Liberalised Remittance Scheme of the Reserve Bank of India; and
b) Seller of an overseas tour program package, who receives any amount from a person who purchases such package.
However, tax shall be collected by the authorized dealer on the amount or aggregate of the amount over Rs. 7 lakh if the remittance is made for any purpose other than the purchase of an overseas tour programme package. If the remittance is made for an overseas tour programme package, the threshold limit of Rs. 7 lakh shall not apply and tax shall be collected on the total remittance amount.
The section also empowers the Central Government to notify a person wherein tax collection shall not be made under this provision.
Exercising such power, the Central Government vide Notification No. 20/2022, dated 30-03-2022 had notified that provisions of section 206C(1G) shall not apply to an individual who is not a resident as per section 6 of the Income-tax Act and who is visiting India.
In the suppression of the above notification, the Central Government has notified that the provisions of section 206C(1G) shall not apply to a person (being a buyer) who is a non-resident and who does not have a permanent establishment in India.
Though the Govt. has withdrawn Notification No. 20/2022, it has been clarified that transactions entered into from 30-03-2022 to 16-08-2022, wherein tax was not collected at source relying upon such notification shall be treated as legally complied with the provisions of section 206C(1G).
Click Here To Read The Full Notification
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