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Guidelines under sub-section (4) of section 194-O, sub-section (3) of section 194Q and subsection (1-I) of section 206C of the Income-tax Act, 1961 - Income Tax - 20/2021

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..... ever, exemption from the said deduction has been provided in case of certain individuals or Hindu undivided family subject to fulfilment of specified conditions. This deduction is required to be made at the time of credit of the amount of such sale or service or both to the account of an e-commerce participant or at the time of payment thereof to such e-commerce participant, whichever is earlier. 2. Finance Act, 2020 also inserted sub-section (1H) in section 206C of the Act which mandates that with effect from 1st day of October, 2020 a seller receiving an amount as consideration for sale of any goods of the value or aggregate of such value exceeding fifty lakh rupees in any previous year shall collect from the buyer, a sum equal to 0.1 per .....

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Guidelines under sub-section (4) of section 194-O, sub-section (3) of section 194Q and subsection (1-I) of section 206C of the Income-tax Act, 1961 - Income Tax

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..... cation in the Official Gazette, person who would not be considered as buyer for the purposes of this section, subject to fulfillment of specified conditions. 4. Sub-section (4) of section 194-O, sub-section (3) of section 194Q and sub-section (1-I) of section 206C of the Act empowers the Board (with the approval of the Central Government) to issue guidelines for the purpose of removing difficulties. 4.1 In this regard, vide circular no. 17 of 2020 dated 29.09.2020. guidelines were issued by the Board (with the approval of the Central Government) in relation to the provisions of section 194-O and section 206C( IH) of the Act in certain cases to remove difficulties and provide clarity for certain transactions. 4.2 Further, vide circular no. 1 .....

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Guidelines under sub-section (4) of section 194-O, sub-section (3) of section 194Q and subsection (1-I) of section 206C of the Income-tax Act, 1961 - Income Tax

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..... een the buyer and the seller which are not done through the electronic portal of the e-auctioneer. Further, the price so discovered can be further negotiated between the parties without the knowledge of the e-auctioneer, in such a scenario, it has been represented that provisions of section 194-O of the Act does not apply as the transaction of sale/purchase itself is not taking place through the electronic portal. 5.1.2 From the representations made, the following facts have been noticed: (a) The e-auctioneer conducts e-auction services for its clients in its electronic portal and is responsible for the price discovery only which is reported to the client. (b) The price so discovered through e-auction process is not necessarily the price at .....

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Guidelines under sub-section (4) of section 194-O, sub-section (3) of section 194Q and subsection (1-I) of section 206C of the Income-tax Act, 1961 - Income Tax

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..... on 194Q and 206C (1H) of the Act, as the case may be. 5.2 Adjustment of various state levies and taxes other than GST 5.2.1 In Para 4.3.2 of circular no. 13 of 2021 dated 30.06.2021, it has been provided that in case the GST component has been indicated separately in the invoice and tax is deducted at the time of credit of the amount in the account of the seller, then the tax is to be deducted under section 194Q of the Act on the amount credited without including such GST. It has been further provided that in case the tax is deducted on payment basis as the payment is earlier than the credit, the tax is to be deducted on the whole amount as it is not possible to identify that payment with GST component of the amount to be invoiced in future .....

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Guidelines under sub-section (4) of section 194-O, sub-section (3) of section 194Q and subsection (1-I) of section 206C of the Income-tax Act, 1961 - Income Tax

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..... Applicability of section 194Q of the Act in cases where exemption has been provided under section 206C (1A) of the Act 5.3.1 Sub-section (IA) of section 206C of the Act provides that notwithstanding anything contained in sub-section (1) of the said section, no tax is to be collected in case of a buyer, who is a resident in India, if such buyer furnishes to the person responsible for collecting tax. a declaration to the effect that the goods (as referred to in sub-section (1)) are to be utilized for the purposes of manufacturing, processing or producing articles or things or for the purposes of generation of power and not for trading purposes. 5.3.2 As per the provisions of sub-section (1H) of section 206C of the Act, tax is to be collected .....

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Guidelines under sub-section (4) of section 194-O, sub-section (3) of section 194Q and subsection (1-I) of section 206C of the Income-tax Act, 1961 - Income Tax

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..... t), to enquire if such department is required to deduct tax under the provisions of section 194Q of the Act. 5.4.2 As per the provisions of section 194Q. tax is to be deducted by a person, being a buyer, whose total sales, gross receipts or turnover from business carried on by that person exceed ten crore rupees during the financial year immediately preceding the financial year in which the goods are purchased by such person. Thus, for a person to be considered as a buyer for the purposes of section 194Q of the Act. following conditions are required to be fulfilled: (a) Such person shall be carrying out a business/ commercial activity: (b) The total sales, gross receipts or turnover from such business/ commercial activity shall be more than .....

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Guidelines under sub-section (4) of section 194-O, sub-section (3) of section 194Q and subsection (1-I) of section 206C of the Income-tax Act, 1961 - Income Tax

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