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Processing of Statement of TCS [Section 206CB]

Currently, there does not exist any provision in the Act to enable processing of the TCS statement filed by the collector as available for processing of TDS statement. As the mechanism of TCS statement is similar to TDS statement, the Act has inserted section 206CB in the Act which provides as under:

(A) Manner of Processing the Quarterly Statement of TCS [Section 206CB(1)]

Where a statement of tax collection at source or a correction statement has been made by a person collecting any sum (herein referred to as collector) under section 206C, such statement shall be processed in the following manner, namely:—

(a)     the sums collectible under this Chapter shall be computed after making the following adjustments, namely:—

(I)           any arithmetical error in the statement;

(ii)          an incorrect claim, apparent from any information in the statement;

(b)     the interest, if any, shall be computed on the basis of the sums collectible as computed in the statement;

(c)        the fee, if any, shall be computed in accordance with the provisions of section 234E;

(d)     the sum payable by, or the amount of refund due to, the collector, shall be determined after adjustment of the amount computed under clause (b) and clause (c) against any amount paid under section 206C or section 234E and any amount paid otherwise by way of tax or interest or fee;

(e)     an intimation shall be prepared or generated and sent to the collector specifying the sum determined to be payable by, or the amount of refund due to, him under clause (ci); and

(f)      the amount of refund due to the collector in pursuance of the determination under clause (d) shall be granted to the collector:

However, no intimation under this sub-section shall be sent after the expiry of the period of one year from the end of the financial year in which the statement is filed.

(B) Board empowered to make scheme for centralized processing [Section 206CB(2)]

The Board may make a scheme for centralised processing of statements of tax collected at source to expeditiously determine the tax payable by, or the refund due to, the collector, as required under section 206CB(1).

(C) Consequential changes in other sections due to insertion of section 206CB relating to processing of quarterly statement of TCS

Under the existing provisions of the Act, after processing of TDS statement, an intimation is generated specifying the amount payable or refundable This intimation generated after processing of TDS statement is (I) subject to rectification under section 154 of the Act; (ii) appealable under section 246A of the Act; and (iii) deemed as notice of demand under section 156 of the Act. As the intimation generated after the processing of TCS statement shall be at par with the intimation generated after processing of TDS statement, the Act has made the following amendments in sections 154, 246A and 156 of the Act wherever required on the same line of processing of TDS statements.

Intimation generated after processing of TCS statement shall also be—

(i)         subject to rectification under section 154 of the Act;

(ii)        appealable under section 246A of the Act; and

(iii)       deemed as notice of demand under section 156 of the Act

Further, as the intimation generated after processing of TCS statement shall be deemed as a notice of demand under section 156 of the Act, the failure to pay the tax specified in the intimation shall attract levy of interest as per the provisions of section 220(2) of the Act.

However, section 206C(7) of the Act also contains provisions for levy of interest for non-payment of tax specified in the intimation to be issued. To remove the possibility of charging interest on the same amount for the same period of default both under section 206C(7) and section 220(2) of the Act, the Act has inserted sub-section (2C) in section 220 which provides as under:

Notwithstanding anything contained in section 220(2), where interest is charged under section 206C(7) on the amount of tax specified in the intimation issued under of section 206CB(1) for any period, then, no interest shall be charged under section 220(2) on the same amount for the same period.

(D) Requirement to furnish PAN by Collectee of TCS [Section 206CC]

(1) Higher rate of TCS lithe collectee does not furnish PAN [Section 206CC (1)]:

Notwithstanding anything contained in any other provisions of this Act, any person paying any sum or amount, on which tax is collectible at source under Chapter XVII-BB (herein referred to as collectee) shall furnish his Permanent Account Number to the person responsible for collecting such tax (herein referred to as collector), failing which tax shall be collected at the higher of the following rates. namely: —

(i)         at twice the rate specified in the relevant provision of this Act or

(ii)        at the rate of 5%

(2) Declaration in Form No. 27C not valid if PAN is not provided [Section 206CC (2)]:

No declaration under section 206C(1A) in Form No. 27C shall be valid unless the person furnishes his Permanent Account Number in such declaration.

(3) Consequences if the declaration furnished is invalid [Section 206CC (3)]:

In case any declaration becomes invalid under section 206CC(2), the collector shall collect the tax at source in accordance with the provisions of section 206CC(1).

(4)   Application for obtaining certificate for lower deduction of TCS [Section 206CC (4)]:

No certificate under section 206C(9) shall be granted unless the application in Form No. 13 made under that section contains the Permanent Account Number of the applicant.

(5) Collector and Collectee to indicate PAN in all correspondence. bills, etc. [Section 206CC (5)]:

The collectee shall furnish his Permanent Account Number to the collector and both shall indicate the same in all the correspondence, bills, vouchers and other documents which are sent to each other.

(6) Invalid or wrong PAN will attract TCS as per section 206CC (1) [Section 206CC(6)]:

Where the Permanent Account Number provided to the collector is invalid or does not belong to the collectee, it shall be deemed that the collectee has not furnished his Permanent Account Number to the collector and the provisions of sub-section (1) shall apply accordingly.

(7) Provisions not applicable in case of non-resident have been no PE in India [Section 206CC (7)]:

The provisions of this section shall not apply to a non-resident who does not have permanent establishment in India.

 

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