TCS Configuration under Sec. 206C

Tax Collected at Source (Under Sec. 206C) Configuration

This is a legal requirement and it is required for companies dealing with scrap sales, Alcohol sales and timber sales. TCS is applicable to the buyer, deducted by seller, during sale of the following items:

o Alcoholic liquor for human consumption(other than Indian made

foreign liquor)

o Tendu leaves

o Timber

o Any other forest produce not being Timber/Tendu leaves

o Scrap

This is a tax which is to be deducted for prescribed items, by the

Seller at the time of debiting the amount payable by the buyer. This tax deduction is to be done at transaction item level based on the

Prescribed rates defined by the Income tax office.

In addition, the seller is to submit a certificate to the buyer

regarding the tax deducted and paid on their behalf, pay the prescribed

amount to the government and file half yearly returns on the same.

Required Configuration:

1. Define Withholding Tax key (206C)
2. Define Withholding Tax type
3. Create the access sequence for withholding for TCS in SD

(Copy the existing access sequence J1AW and create the new access sequence)

4. Create condition types corresponding to Tax collected at Source in SD
5. Assign withholding tax types to SD condition types
6. Define withholding tax codes
7. Assign GL accounts for withholding tax types
8. Add TCS conditions in pricing procedure

(assign TCS conditions in pricing procedure as a statistical conditions)

9. We will need to define a new condition type and add this to the pricing procedure to post to the FI. This condition type will be manual and can be manually filled at the time of creation of sales order. This can also be copied from the statistical TCS condition types in the pricing procedure