Mobile phone players seek extension of tax collection at source roll-out from April 01, 2021

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Mobile phone and electronics manufacturers have requested the government to extend the date of implementation of tax collection at source by six months to April 1, 2021. Industry body India Cellular and Electronics Association (ICEA), whose members include Apple, Foxconn, Winstron, Lava etc, has written to the finance minister to defer the implementation of TCS from October 1 due to several reasons, including impact of novel coronavirus pandemic, lack of clarity in the rules, and clash with e-invoicing roll out from the same day.

ICEA Chairman Pankaj Mohindroo said financial year 2020-21 is more or less fully affected by COVID-19 with a sharp drop in revenues, excess cost of operations due to strict implementation of health-related safety measures and low possibility of taxable profit. “We request TCS implementation to be postponed to next financial year to avoid unnecessary hardship to the industry in terms of cash flow blockage in this already challenging time,” Mohindroo said in a letter dated September 23.

ICEA said that the nation is going for an e-invoicing mechanism with effect from October 1 which itself is a huge task in terms of systems modification to connect with the GST network portal. “Adding TCS implementation also along with e-invoicing will be highly challenging and necessary focus for e-invoicing implementation may not be possible,” Mohindroo said. He said that there are several issues related to TCS on which industry needs clarification.

The industry players are not sure if TCS has to be charged on the value including goods and services tax (GST), its applicability on security deposits, advances etc received from dealers or buyers, treatment in case of sales return and bad debts etc and has sought clarification from the government. “In order to avoid the implications of mid-year implementation for calculating the threshold limit of revenue or receipt for a specified year for the total supply chain, it is better to implement from the start of the next financial year,” Mohindroo said.

Read More at: https://www.financialexpress.com/industry/mobile-phone-players-seek-extension-of-tax-collection-at-source-roll-out-from-april-1/2093612/

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