Traders up in arms against cumbersome provisions of Finance Act 2021

Tribune News Service
Amritsar, June 19

Advertisement

Traders and their associations are up in arms against the Central Government for introducing cumbersome provisions of 194Q of the Finance Act 2021, which will come into effect from July 1.

Small and medium GST dealers said they were facing liquidity crunch in the second wave of Covid-19 pandemic, in which it had become hard to survive.

The Punjab Pradesh Beopar Mandal (PPBM) suggested to increase the threshold of buyer’s turnover limit in the preceding year from Rs10 crore to Rs50 crore and single party limit from Rs50 lakh to Rs1 crore for levying TDS on purchases so that small businesses, who are already complying with law through a part-time accountant with limited manpower and financial resources, get a sigh of relief.

Piara Lal Seth, president of the PPBM, said: “Practical implementation of both Sections 194Q and 206C (1H) is a bigger task. If by mistake TDS is not deducted, then 30 per cent of the purchase amount shall be disallowed under Section 40 (a) (ia) and will be added to the total income. Every seller having a turnover of more than specified limit is already charging TCS on its sale bills. It would be a very complex task for both the buyers having more than specified limit turnover to intimate all their buyers that they will be deducting TDS and not charging TCS on sale bills.”

Sameer Jain, GST dealer, said in this edition of the Union Budget the provision of Section 194Q was laid, wherein TDS would be required to be deducted at the rate of 0.10 per cent on the purchase made after July 1, wherein the purchase from a specific person during the year exceeds Rs50 lakh and the company has a total turnover exceeding Rs10 crore in the previous year. According to Section 206C (1H) if a transaction is subject to TCS u/s 206C (1H), then buyer shall have first obligation to deduct tax. If he does so, the seller will not have any obligation to collect tax u/s 206C (1H). Seller shall be liable to collect tax only if the purchaser is not liable to deduct tax or purchaser failed to deduct tax.