Form 27C – Purpose, Requirements & New FAQ dated 28th August 2023

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Tax Collected at Source (TCS) is a system where a seller of certain goods collects taxes from the buyer.

Also Read Section 206C(1H)

Now, if the buyer is not liable to pay any taxes and wishes to inform the seller about the non-deduction of taxes, he/she can submit Form 27C of the Income Tax Act. In this case, the list of specific goods includes timber, scrap materials, tendu leaves, etc.

Form 27C Applicability

Following is a list of sellers, goods and buyers who fall under the applicability of Form 27C: 

Indian Made Foreign Liquor (IMFL) – alcoholic liquor for consumption by humanCentral Government
Timber acquired via forest leaseLocal Authorities
Tendu leavesState Government
Timber acquired by any means except for forest leaseStatutory Authorities or Corporations
Any forest produce other than Tendu or TimberCo-operative Societies
Leasing or licensing of toll plaza, parking areaSole Proprietary Firm or Partnership Firm
Scarp (scrap or waste from mechanical working or manufacturing of materials that is not usable due to cutting up, breakage, wear or any other reason)Public or Private Companies
Quarrying and miningHindu Undivided Family (HUF)

Why is Form 27C Required?

Form 27C is required to determine the buyer’s eligibility for TCS exemption. The buyer tells the seller that the transaction comes within the appropriate parameters, allowing them to claim the exemption. This document is tangible proof, safeguarding the buyer’s rights and encouraging tax transparency.

When submitting Form 27C, it is critical to include correct information. Buyers must carefully fill in all details like their name, address, PAN, purchased goods and utilities. Remember to crosscheck all the information before submitting. Any mistake in filling out this form will require you to repeat this process all over again. Furthermore, it may involve additional steps.  

Now on 29th August 2023 Government issued below FAQ for form 27C

Question 1: Who is required to file Form 27C on E-filing portal, buyer or seller?

Resolution: The Seller is required to file Form 27C on E-filing portal.

Question 2: How can buyer furnish the declaration to seller under section 206C(1A) for obtaining goods without collection of tax?

Resolution: The Buyer is required to manually fill Part-I of form 27C and submit it to the seller.

Question 3: What are the prerequisites for filing of Form 27C?

Resolution: The following are the prerequisites for filing of Form 27C-

• Seller should have TAN

• TAN of seller should be active and registered on the e-Filing portal.

Question 4: What is the process to file Form 27C on E filing portal?

Resolution: Following are the steps to file online Form 27C-

Step 1: Seller to login on Income Tax Portal i.e. using TAN as User ID.

Step 2: Navigate to e-file —–> Income Tax Forms —-> File Income Tax Forms —-> Persons not dependent on any Source of Income (Source of Income not relevant) —-> Form 27C.

Step 3: Fill the details in “Part I- Details of the buyers” and “Part II- Details of seller, Attachments and Verification”.

Step 4: The seller shall scan and upload part I of the form, received from buyers as attachments under “Part II- Details of seller, Attachments and Verification” of the online form and proceed for filing Form 27C.

Question 5: Which documents/details are required to file Form 27C on e-filing portal?

Resolution: Following documents/ details are required-

• Details of the buyers (Name, PAN/Aadhar, Address, Status, email id, Mobile no, Nature of Business, Nature of goods and Purpose of utilizing the goods shall be provided for each Buyer)

• Date on which declaration is furnished

• Date of debiting of the amount payable by the buyer to the account of the buyer or receipt of the amount payable from the buyer in cash or by issue of a cheque or draft or by any other mode

• Self-certified copies of the declaration made by the buyers stating that the goods purchased are not to be utilised for trading purposes.

Question 6: What is the due date for filing Form 27C?

Resolution: Form 27C shall be filed by the seller on or before the 7th day of the month next following the month in which the declaration is furnished to him by the buyer.

Question 7: Is it possible to revise filed Form 27C?

Resolution: Yes, filed Form 27C details can be revised. User needs to choose “Revised” option along with relevant Financial Year and Month selection to proceed for revision mechanism.

Question 8: Is it possible to revise filed Form 27C for a particular period (i.e. Financial Year and Month combination) more than once?

Resolution: No, Form 27C filed for a particular Financial Year and Month combination can be revised only once. Once a revision is filed, no further revision for same period shall be allowed.

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Pooja Gupta

CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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