Amendment of section 206C.
93. In section 206C of the Income-tax Act,––
(I) after sub-section (1F), the following sub-sections shall be inserted, namely:––
'(1G) Every person,––
(a) being an authorised dealer, who receives an amount, or an aggregate of amounts, of seven lakh rupees or more in a financial year 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 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 program 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 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 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) 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.';
(II) in sub-section (2), for the words, brackets, figures and letter “sub-section (1) or sub-section (1C)”, the words “this section” shall be substituted;
(III) in sub-section (3), for the words, brackets, figures and letter “sub-section (1) or sub-section (1C)”, the words “this section” shall be substituted;
(IV) in sub-section (6A), in the first proviso, for the words “in accordance with the provisions of this section”, the words, brackets, figures and letter “in accordance with the provisions of sub-section (1) and sub-section (1C)” shall be substituted;
(V) in the Explanation, in clause (c),––
(i) for the word “means”, the words, brackets, figures and letter “with respect to sub-section (1) and sub-section (1F) means” shall be substituted;
(ii) for the words, brackets, letters and figures “the monetary limits specified under clause (a) or clause (b) of section 44AB”, the words “one crore rupees in case of business or fifty lakh rupees in case of profession” shall be substituted.
Notes on Clauses:
Clause 93 of the Bill seeks to amend section 206C of the Income-tax Act, relating to profits and gains from the business of trading in alcoholic liquor, forest produce, scrap, etc.
Sub-section (1) of the said section provides that 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 specified nature a sum equal to the specified percentage, of such amount as income-tax.
Clause (c) of the Explanation to the said section provides that the “seller” 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 the monetary limits specified under clause (a) or clause (b) of section 44AB 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.
It is proposed to amend the said clause so as to provide that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed 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 such interest is credited or paid, shall be liable to deduct income-tax under the said section.
It is further proposed to insert a new sub-section (1G) in the said section so as to provide that every person being an authorised dealer, who receives any amount, or an aggregate of amounts, of seven lakh rupees or more in a financial year for remittance out of India under the Liberalised Remittance Scheme of the Reserve Bank of India from a buyer, being a person remitting such amount out of India; or 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 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 by any mode, whichever is earlier, collects from the buyer, a sum equal to five per cent. of such amount as income-tax.
The provisions of the said sub-section shall not apply if the buyer is liable to deduct tax at source under any other provision of the Act and he has deducted such amount. It is further provided that the provisions of the said sub-section shall not apply if the buyer is the Central Government, or a State Government, or an embassy, or a High Commission, or a legation, a commission, a consulate, the trade representation of a foreign State, or a local authority as defined in the Explanation to clause (20) of section 10 or any other person notified by the Central Government for this purpose subject to conditions as may be specified in that notification.
For the purposes of the said sub-section, it is also proposed to define the expressions “authorised dealer” and "overseas tour package".
It is also proposed to insert sub-section (1H), to provide that 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 covered in sub-section (1) or sub-section (1F) or (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. It is further provided that in case the buyer does not furnishes his PAN or Aadhaar number to the seller, then the tax shall be collected by the seller at the rate of one per cent. Further, the provision of this sub-section shall not apply if the buyer is liable to deduct tax at source under any other provision of the Act and he has deducted such amount.
It is also proposed to define the terms "buyer" and "seller".
It is also proposed to amend sub-section (2) of the said section so as to provide that the power to recover tax by collection under the said section shall be without prejudice to any other mode of recovery.
It is also proposed to amend sub-section (3) of the said section so as to provide that any person collecting any amount under this section shall pay within the prescribed time the amount so collected to the credit of the Central Government or as the Board directs.
It is also proposed to amend the first proviso to subsection (6A) of the said section so as to provide that any person who is responsible for collecting tax in accordance with the provisions of sub-section (1) and sub-section (1C), 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 has furnished his return of income under section 139 and has taken into account such amount for computing income in such return of income and the person has paid the tax due on the income declared by him in such return of income and the person has furnished a certificate to this effect from an accountant in such form as provided by rules.
It is also proposed to define the term “seller” and restrict its applicability to sub-section (1) and sub-section (1F) of the said section.
These amendments will take effect from 1st April, 2020.
