CBDT has notified that TCS provisions under IT Section 206C(1G) shall not be applicable in the case of Non Resident buyers who don’t have a Permanent Establishment (PE) in India, applicable w.e.f. 17/08/2022, vide Notification 99/2022 dt. 17/08/2022. In others words, the non-resident buyers who don’t have a PE in India, have been excluded from the purview of TCS under IT Section 206(1G).
Earlier CBDT had relaxed applicability of provisions of IT Section 206(1G) in the case of an individual who is not a resident in India in terms of IT section 6(1) & 6(1A) and who is visiting India, vide Notification 20/2022 dt. 30/03/2022, which has been withdrawn/ superseded with this Notification 99/2022. However, any tax collected under the operative period of earlier Notification shall be treated as compliance of the provisions of section 206C(1G). Also refer CBDT Press Release dt. 31/03/2022.
CBDT Income Tax Notification 99/2022 dt. 17/08/2022: S. 206C(1G) TCS Not Applicable to Non Resident buyers without PE in India
S.O. 3878(E).- In exercise of the powers conferred by clause (ii) to fifth proviso to sub-section (1G) of section 206C of the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as “Act”) and in suppression of the notification of the Government of India, Central Board of Direct Taxes published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) vide number S.O. 1494(E), dt. 30/03/2022, except as respects things done or omitted to be done before such suppression, the Central Government hereby notifies that the provisions of sub-section (1G) of section 206C of the Act shall not apply to a person (being a buyer) who is a non-resident in terms of section 6 of the Act and who does not have a permanent establishment in India.
2. This notification shall come into force with effect from the date of publication of this notification in the Official Gazette.