In respect of the following independent case scenarios you are required to discuss the provisions related to tax deducted/collected at source and…

By virtue of section 206C(1A), Mr. Bharat is not required to collect tax at source under section 206C (1) , since Mr. Amit has furnished a declaration to Mr. Bharat that the scrap purchased by him is for manufacturing process carried on by him and not for trading purposes. However, as clarified vide Circular no. 13/2021 dated 30.6.2021 and Circular No. 20/2021 dated 25.11.2021, TDS under section 194Q will be attracted in the hands of the buyer in such cases covered under section 206C(1A), if the conditions specified under section 194Q are fulfilled. In this case, tax is required to be deducted at source under section 194Q by the buyer, Mr. Amit, since his turnover in the immediately preceding financial year i.e., F.Y.2022-23 exceeds 10crores and he has purchased goods of the value or aggregate of such value exceeding 50lakhs in the F.Y.2023-24. TDS u/s 194Q would be 0.1% of the sum exceeding 50lakhs and the same has to be deducted at the time of payment or credit of such sum to the account of resident seller, whichever is earlier. Therefore, in the present case, Mr. Amit is required to deduct tax at source @ 0.1% of 15,00,000, being the amount exceeding 50lakhs (₹ 49,00,000, being the payment made plus 16lakhs, being the amount credited to the account of Mr. Bharat). Note: It may be noted that section 206C(1H) would not apply where section 194Q is applicable.