Detailed Analysis of Sec. 194Q and 206C(1H)
• Every person, being a seller, who receives any amount as consideration for the 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 1 percent of the sale consideration as income tax.
Sec. 206C(1H) 01.10.2020
• Every person, being a seller, who receives any amount as consideration for the sale of any goods of the value or the 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
-206C (1) or
-206C (1F) or
• shall, at the time of receipt of such amount, collect from the buyer, a sum equal to 0.1 percent of the sale consideration exceeding fifty lakh rupees as income-tax
Proviso to Sec 206C(1H)
If a buyer has not provided the Permanent Account Number or Aadhar Card to the seller, then the provisions of Section 206CC(1)(ii) shall be read as if word 5%, the word 1% had been substituted.
Further, the provisions of this sub section shall not apply, if a buyer is liable to deduct Tax at source under any other provision of this Act on goods purchased by him from the seller and has deducted such amount
Buyer as per explanation (a) to sec. 206C(1H)
➢ a person who purchases any goods but does not include
➢ the Central Government, a State Government, an embassy, a High Commission, legation, commission, consulate, and the trade representation of a foreign State
➢ a local authority as defined in the Explanation to clause (20) of section 10
➢ 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
Seller as per explanation (b) to sec. 206C(1H)
➢ a person whose total sales, gross receipts or turnover from the business carried on by him exceeds 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.
Section 194Q vis a vis Section 206C(1H)
The section is applicable from 01.10.2020 but receipt of Rs. 50 lacs to be seen for full P.Y.
Section 206C(1I): If any difficulty arises in giving effect to the provisions of subsection (1G) or sub-section (1H), the Board may, with the approval of the Central Government, issue guidelines for the purpose of removing the difficulty.
Section 206C(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.