Iron & Scrap Dealer
Non Issue of TCS exemption certificate u/s 206 (C)

Respected Members,

Sir, we are the trader of Iron and Scrap and generally purchase our goods from ‘Ship Recycling Industries Association (India)’, Bhavnagar, Gujrat. The market of the goods we dealt in is volatile. Rates are not fixed. Every seller has variety of scrap and thus rates. Thus goods are purchased at site in lots from the member who gives us the lowest rates and required quality which is not predefined. Thus the seller and the corresponding amount of purchases cannot be predicted / pre estimated. However estimated purchases to be made in the Financial Yr. can be estimated.

Further, we have to take the delivery of the goods immediately on purchases and at the time of leaving the yard/port of the mandi, the bill with TCS is raised. Thus we do not get a single hour for application of lower TCS deduction for a single transaction. We can only apply for lower deduction of TCS for the year together with the estimated purchases and estimated sellers and not with the seller with corresponding amount of purchases.

Also, the goods are sold at very low margin (estimated GP 2.60 % NP .35 % on the basis of past figures) and some times at loss. On this small amount of net profit how could we survive with deduction of TCS at 1% on purchases? This TCS deducted is refunded to us after 18 to 24 months which put us in the trouble of cash flow and we have to take loan for the same and thus further loss of interest.

We several times have applied u/s 206 (C) for lower deduction of TCS with following enclosures:

1. Estimated Trading and P&L a/c for the year 10 (on the basis of past performance)

2. Estimated Computation of Total Income and tax on the same.

3. Details of TCS already deducted so far.

4. List of seller from whom the purchases are intended to be made. (However the corresponding amount of purchases with the respective seller could not be made for the reasons mentioned earlier)

5. Total estimated purchases to be made in the year 10.

But our applications got rejected for the want of name of seller with corresponding amount of purchases with them.

Also, we have enclosed the photocopy of TCS exemption certificate issued by the ITO Ward 1, Mandi Gobindgarh for lower deduction of TCS on purchase without mentioning the name of seller. The Income Tax department being the Central Govt. department must have the same rules and notifications for the whole India.

So please consider the same and oblige and issue us the certificate for lower deduction of TCS at 0.01%.

Thanking You.