TCS on Purchase and sales

TCS Rule

The provisions of sub-section (1H) of section 206C has been made effective from 1st October 2020 and state that:

1. A Seller of Goods is liable to collect TCS from Buyer on Sale of any goods;
2. Turnover of seller is more than ₹ 10 Crores in preceding financial year;
3. TCS to be collected if the Value/Aggregate Value received for Goods from a buyer is more than ₹ 50 Lakhs in a financial year;
4. TCS to be collected on [ Total Sale Value received – ₹ 50 Lakhs];
5. Rate of TCS is 0.1% , if PAN of buyer is available [ 1% if PAN not Available ].

Setup in ERPNEXT

1. Create New GL for TCS under Account type ”Tax” and Rate 0.1%

On Purchases Invoice Under “Purchases Taxes & Charges” filed Click on Add Row

In Account Head Filed add TCS on Purchases GL ( Which We create Earlier)

Check the Auto Calculation then Save & Submit Document

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