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What is Form 27C in TCS?

Form 27C in TCS is a declaration through which any taxpayer can claim an exemption on a collection of TCS. Like TDS, tax collection at source is a mandatory tax collection on specified transactions. The seller of specified goods collects TCS from the buyer and pays to the credit of the Central Government. Such specified goods include scrap materials, timber, tendu leaves, and so on. 

A buyer can submit a declaration stating that the goods being purchased will be used solely for the purpose of further activities. Such activities include manufacturing, processing, producing articles or things or for the purposes of generation of power. Such declaration is made under Form 27C. On submission of this declaration, the seller will not collect TCS from the buyer of these goods. However, this declaration is not applicable if the buyer intends to use the goods for trading. Trading implies that the buyer buys the goods from one seller and sells them to another party without further manufacturing.  

Applicability of Form 27C of TCS

Form 27C of TCS is applicable to the following eligible goods, buyers, and sellers.

Alcoholic liquor for human consumptionIndian Made Foreign Liquor (IMFL)Central Government
Tendu leavesState Government
Timber procured through a forest leaseLocal Authorities
Timber procured through any means other than a forest leaseStatutory Corporations or Authorities
Any other forest produce except Timber or TenduCo-Operative Societies
Licensing or leasing of Parking Lot, Toll PlazaPartnership FirmSole Proprietary Firm
Mining and QuarryingHUF Hindu Undivided family
Scrap(waste and scrap from the manufacture or mechanical working of materials which is definitely not usable as such because of breakage, cutting up, wear and other reasons)Private or Public Companies

Eligible Buyer

Any buyer who receives the right to receive the delivery of goods through an auction, sale, or tender is eligible for an exemption. Form 27C is not applicable to the following buyers:

  1. A taxpayer who buys these goods for personal consumption
  2. Central Government
  3. State Government
  4. Embassy of High Commission, Consulate and other Trade Representation of a Foreign State
  5. A Public Sector Company
  6. Any Club

Documents Required to File Form 27C in TCS

Form 27C in TCS requires submission of the form in the following 2 parts. 

  1. Part-1- To be filled by the buyer of the goods without TCS. Part-1 contains information about the buyer like name, PAN, address, nature of business and goods, assessing officer, and AO code. 
  2. Part-2- To be filled in by the seller of these goods and the receiver of the buyer’s declaration. Part-2 contains information such as name, address, PAN, TAN, email, phone number, and so on. The most important information is the date on which the declaration is furnished and the date of receipt of payment from the buyer or debit of accounts.

Things to Remember While Filing Form 27C

  1. The buyer makes a declaration and submits 2 copies of the form to the seller. 
  2. The seller receives the declaration and submits form 27C in TCS to the Chief Commissioner or Commissioner of the Income Tax Department. The seller must submit the declaration on or before the 7th day of the month following the month in which the declaration is received.
  3. The information must be true and correct. If any information is misleading or false then the declarant shall be liable to prosecution under 277 of the Income-tax Act, 1961. 
  4. If the amount sought to be evaded is more than Rs 25 lakhs then this offence is punishable with imprisonment as well as a fine. The imprisonment will exceed 6 months and remain less than seven years.
  5. If the amount sought to be evaded is less than Rs 25 lakhs then the imprisonment will be minimum of 3 months. However, the imprisonment will not exceed 2 years. Moreover, a fine will be applicable in any case.

Frequently Asked Questions

How can I download Form 27C of TCS?

You can simply visit the official website of the Income Tax Department. You will find the option of ‘Downloads’. Select the option and use the drop-down to click on ‘Other Forms’. You will find a list of all forms that are relevant for any taxpayer. From the search bar, search Form 27C and you can download either a PDF file or a fillable form.

Who has to file Form 27C?

The buyer of goods must submit a declaration in Form 27C to the seller. The seller is further responsible for filing Form 27C.

Who will submit Form 27C to the Income Tax Department?

The seller will submit Form 27C to the Income Tax Department. The seller must submit Form 27C to the Chief Commissioner or Commissioner of the Income Tax Department. The due date of filing is on or before the 7th day of the month following the month in which the declaration is received.

Is there a fee for filing Form 27C?

No, there is no fee for filing Form 27C of TCS to the Income Tax Department.

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