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    Note On TDS

    Uploaded by

    Radha Krishna
    The document notifies customers that new tax deduction at source (TDS) provisions under Section 194Q of the Income Tax Act will apply starting July 1, 2021, where buyers making purchases over Rs. 50 lakhs must deduct 0.1% TDS, or 5% if PAN is not provided; it provides guidance on how TDS will impact customers' DriveTrack Plus accounts depending on whether they purchase from dealers or directly from HPCL; and it emphasizes that customers are responsible for complying with TDS requirements per the Income Tax Act.

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    Note On TDS

    Uploaded by

    Radha Krishna
    29 views3 pages
    The document notifies customers that new tax deduction at source (TDS) provisions under Section 194Q of the Income Tax Act will apply starting July 1, 2021, where buyers making purchases over Rs. 50 lakhs must deduct 0.1% TDS, or 5% if PAN is not provided; it provides guidance on how TDS will impact customers' DriveTrack Plus accounts depending on whether they purchase from dealers or directly from HPCL; and it emphasizes that customers are responsible for complying with TDS requirements per the Income Tax Act.

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    Note on TDS

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    The document notifies customers that new tax deduction at source (TDS) provisions under Section 194Q of the Income Tax Act will apply starting July 1, 2021, where buyers making purchases over Rs. 50 lakhs must deduct 0.1% TDS, or 5% if PAN is not provided; it provides guidance on how TDS will impact customers' DriveTrack Plus accounts depending on whether they purchase from dealers or directly from HPCL; and it emphasizes that customers are responsible for complying with TDS requirements per the Income Tax Act.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    29 views3 pages

    Note On TDS

    Uploaded by

    Radha Krishna
    The document notifies customers that new tax deduction at source (TDS) provisions under Section 194Q of the Income Tax Act will apply starting July 1, 2021, where buyers making purchases over Rs. 50 lakhs must deduct 0.1% TDS, or 5% if PAN is not provided; it provides guidance on how TDS will impact customers' DriveTrack Plus accounts depending on whether they purchase from dealers or directly from HPCL; and it emphasizes that customers are responsible for complying with TDS requirements per the Income Tax Act.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 3

    To : All Drive Track Plus Customers Date: 25 / 06 / 2021

    Tax Deduction at Source (TDS) provisions Deduction of tax at source (TDS) on payment of certain sum
    for purchase of goods under Section 194Q of the Income Tax Act, introduced vide Finance Act 2021

    As per the Finance Act 2021, a new Section 194Q on ‘Deduction of tax at source on payment of certain
    sum for purchase of goods’ is applicable w.e.f. from 1st of July 2021 in the Income Tax Act, wherein Buyer
    carrying on a business whose Total Sales, Gross Receipts or turnover from the Business exceeds Rs 10
    Crores during the financial year immediately preceding the Financial Year in which such goods are
    purchased, shall deduct TDS under the Section 194Q of the Income Tax Act:

    (a) At the rate of 0.1% of the Purchase Value exceeding Rs.50 lakhs (in aggregate) from a resident
    person, at the time of making the payment.

    (b) Where the PAN or Aadhar Number is not provided by the Seller, Tax shall be deducted at the rate
    of 5%.

    Further, where the section 194Q is applicable, the provisions of section 206C(1H) [TCS so far being
    collected by HPCL as seller] will not be applicable.

    Based on the above criteria, there are two types of customers, one with supply value more than Rs. 10
    Crore and one with less than Rs. 10 Crore.

    Customer with Supply Value more than Rs. 10 Cr.

    If the supply value from HPCL/Dealer (as the case may be) to customer is more than Rs 10 crore, it will be
    assumed that turn over of the customer is also more than Rs 10 Crore during the year 2020-21.

    Accordingly, HPCL/Dealer (as the case may be) will discontinue collection of TCS for invoices to be raised
    from 1st of July 2021 and customer shall deduct TDS u/s 194Q, in compliance with relevant provisions
    including remittance of the TDS so deducted to the Govt and provide us necessary TDS Certificate. If in
    case his turn over is less than Rs 10 Crore, he should confirm the same to the concerned Marketing Officer
    of HPCL / Dealer respectively, through a letter.

    Being mandatory provision for the Buyer to deduct Tax, in absence of the same, besides penal action if
    any by Income Tax Dept directly on such defaulting buyers, additionally TCS has to be collected by
    HPCL/Dealer (as the case may be) as seller.

    Hence, customer should deduct TDS to avoid any penal provisions and in case there is failure to deduct
    on your part, HPCL/Dealer (as the case may be) shall recover the tax as per the provisions of Section
    206C(1H) along with applicable interest and penalty if any.
    Customer with Supply Value less than Rs. 10 Cr.

    In this case, HPCL/Dealer (as the case may be) has been collecting TCS as per section 206C (1H). Here
    customer has to confirm HPCL/Dealer (as the case may be), his turnover during preceding financial year if
    more than Rs 10 Cr.

    Basis customer’s declaration (if turnover during Financial Year 2020-21 exceeded Rs 10 Crs.), HPCL/Dealer
    will discontinue collecting TCS on invoices raised from 1st of July 2021. Customer shall deduct TDS u/s
    194Q and provide HPCL/Dealer (as the case may be) the proof of deposit to the exchequer in order to
    enable HPCL/Dealer (as the case may be) to take Credit, and also send the Form 16A at the appropriate
    time.

    Following will be applicable for DriveTrack Plus Customers:


    1. If Customer takes from Dealer operated outlets :

    Here Customer has to deduct TDS before making payment to the Dealer. It should be noted that
    Customer’s DriveTrack Plus account will get recharged only to the tune of the net amount being paid by
    the customer to DriveTrack Plus program.

    Benefit towards the TDS shall be passed on from the Dealer to the Customer directly, once Customer
    submits the TDS certificates to the Dealer, which will be outside the DriveTrack Plus system.

    DriveTrack Plus will continue to be recharged with the actual transaction amount (net of TDS) and TDS will
    have to be handled by the dealer separately.

    2. If Customer takes from COCOs or COMCOs :

    Here, firstly customers have to submit a declaration in the attached format (as per the yearly turnover) to
    the COCOs / COMCOs, from where he is uplifting product.

    Customer has to deduct TDS before making payment, considering all COCOs and COMCOs as one entity
    to arrive at total upliftment from HPCL.

    Similar to the above case, here also Customer’s DriveTrack Plus account will get recharged to the tune of
    the net amount being paid by the customer to DriveTrack Plus program.

    Benefit towards the TDS shall be passed on from HPCL to the Customer once the following is completed:

     Customer submits the TDS certificates to the COMCO Officer or Sales Officer or Marketing Officer
    of HPCL.
     Same are required to be submitted by these officers to HPCL’s Retail Commercial Dept., who will
    take up with Tax Dept.
     Once Retail Commercial Department credits the Loyalty Liability GL in JDE and once credit to HPCL
    is confirmed to HQO Loyalty Cards team by Retail Commercial Dept., necessary credit will be
    passed on to DriveTrack Plus CCMS account of the concerned customer.
    Therefore, it is absolutely necessary for all loyalty customers to co-ordinate with the concerned HPCL
    Marketing Officers and ensure correct updation of PAN in HPCL records (i.e. Profile in Drive Track Plus
    System) .

    This communication is meant only to serve as a guide to our customers to educate them about the
    provisions of TDS, so that they are made aware of their obligations under the Income Tax Act.

    HPCL neither intends to nor shall bear any responsibility for compliance or otherwise with the provisions
    of Income Tax Act with regard to TCS which is required to be complied with by the HPCL’s dealerships.
    Customers may like to consult their respective Income tax consultants for detailed guidance / compliance.

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