Form 27C

Form 27C
Purpose To claim exemption on TCS of specific goods as per the conditions of Section 206C (1) of IT Act, 1961
Who Can Use It? Buyers and sellers of the certain goods
Eligibility You can only purchase the goods for production, processing, or manufacturing of further items

Form 27C is a document to apply for exemption of Tax Collected at Source (TCS). This is used by buyers and sellers of specific goods as per the Income Tax Act, 1961. According to Section 206C (1), taxes on goods are collected from the buyer. So, TCS applies to taxation for the sale of goods. On meeting certain norms, if you fill and submit Form 27C, you can save on Tax Collected at Source.

In this post, we will discuss Form 27C features, goods you can procure for tax exemption, eligible buyers and sellers, and frequently asked questions.

Features of Form 27C

Here are the details:

  • Form 27C is an admissible document with which you can claim tax exemption on TCS for a list of goods
  • The buyers of goods can use this form only if the purchase is for production, manufacturing, or processing for further things, articles, or goods
  • This TCS form is not usable if the purchase of goods is for trading purpose
  • This form has two sections. The buyer and seller have to duly fill and sign this document
  • In Part 1 of the document, you have to provide the details of the buyer, PAN number, address, list of obtained goods, and the purpose of purchase
  • In Part 2 of the document, you have to provide the details of the seller, PAN and TAN numbers, address, category of the seller
  • Along with Form 27C, you have to submit details of PAN and TAN, and the receipt of sale of mentioned goods

Goods Eligible for Tax Exemption

The eligible goods on which you can claim tax exemption are:

  • Tendu leaves
  • Alcoholic liquor and Indian made foreign liquor for human consumption
  • Mining and quarrying
  • Timber through forest lease or any other means
  • Waste and scrap from mechanical working or manufacture of materials for cutting up, breakage, wear and tear, etc
  • Any other produce from forest except Tendu or Timber
  • Licensing or leasing of Parking Lot, Toll Plaza

Buyers Eligible to Use Form 27C

Any entity or person eligible to obtain rights to receive goods or the goods itself in auction, sale, tender, or other channels except the ones stated below:

  • Central Government
  • Public sector companies
  • State Government
  • Any Club such as sports or social clubs and likewise
  • Trade Representation, Embassy of High Commission, and other Consulates of a Foreign State

Sellers Eligible to Use Form 27C

Here are the admissible sellers:

  • Individual or HUF (Hindu Undivided Family) under Section 44AB
  • Local authorities
  • State Government
  • Central Government
  • Co-operative societies
  • Companies
  • Statutory corporations or authorities
  • Firms

Frequently Asked Questions about Form 27C

Here are the Form 27C FAQs:

The buyer submits Form 27C through a declaration that the good purchased is not for trading but intended for manufacturing or processing. The buyer has to submit this declaration to the entity collecting the tax (seller). The seller has to submit a copy of this declaration to the concerned authorities (Chief Commissioner or Commissioner). The submission of the documents should happen before or on the 7th day of the next month.

The seller has to deposit the tax amount in a week from the last working day of the previous month.

The seller, who deposits the amount of tax, should deposit Form 27EQ for returns every quarter.

This is a quarterly statement. It contains information on TCS at the end of each quarter. The rules pertain to Section 206C of the IT Act 1961. Government deductors and collectors as well as corporate deductors and collectors have to submit this form for TCS return.

All of these forms are for Tax Collected at Source. Form 27D is for the certificate of TCS. Form 13 is for a rebate on this tax. And Form 27C is for exemption on TCS on specific goods as listed in the Income Tax Act.