Insertion of rules through section 206C (1E) by MoF

The Ministry of Finance (Department of Revenue)  by Notification 75/2016  dated 19th August, 2016 inserted the following rules through section 206C (1E) :-

“Class or classes of buyers to whom provisions of sub-section (1D) of section 206C shall not apply.

37CB. (1) The provisions of sub- section (1D) of section 206C in relation to sale of any goods (other than bullion or jewellery) or providing any service shall not apply to the following class or classes of buyers , namely:—

(i) Government;

(ii) embassies, Consulates, High Commissions, Legation or Commission and   traderepresentation, of a foreign State;

(iii) Institutions notified under United Nations (Privileges and Immunities) Act, 1947”.

Analysis of the above provision:-

1. This provision specify the class or classes of buyers on whom the provisions of sec 206C (1D) which deals with TCS on cash sales of goods & services, shall not apply.

2. This provision shallapply to sale of any goods (except bullion or jewellery) and providing of any services.

3. This section exempts only the following class or classes of buyers from paying TCS on cash purchase of any goods (other than bullion or jewellery) or receiving any service exceeding Rs 2 lakh -

a. Government;

b. Embassies, Consulates, High Commissions, Legation or Commission and   trade representation, of a foreign State;

c. Institutions notified under United Nations (Privileges and Immunities) Act, 1947”.

4. Thus the provisions of this section applies to every buyer other than those mentioned in relation to purchase of any goods (other than bullion or jewellery) or receiver of any service exceeding Rs 2 lakh.